Holding

Section 13 of the Maritime Zones of India Act, 1981 is mandatory; upon conviction of the master or charterer under Sections 10, 11 or 12, the vessel must be confiscated.

Summary

Two foreign trawlers chartered by an Indian company were seized for fishing in India's exclusive economic zone in violation of a permit that required fishing at depths greater than 40 fathoms. The masters were convicted and fined, while the charterer company and its managing director were initially acquitted but later convicted on appeal, with the High Court ordering confiscation of the vessels under Section 13 of the Maritime Zones of India Act, 1981. The appellants challenged whether Section 13 made confiscation mandatory or discretionary and contested the presumption that fish were on board. The Supreme Court examined the object and scheme of the Act, held that the language "shall also be liable to confiscation" is clear and mandatory, and that confiscation follows automatically upon conviction under Sections 10, 11 or 12. Consequently, all the appeals were dismissed and the High Court's orders affirmed.

Issues considered

Whether Section 13 of the Maritime Zones of India Act, 1981 imposes a mandatory confiscation of the vessel upon conviction under Sections 10, 11 or 12, or leaves discretion to the court.
Whether a presumption of fish on board can be drawn under Section 22 of the Act when no fish were found at the time of apprehension.

Legislation cited

Madhya Bharat Opium Acts. 11
Maritime Zones of India Act, 1981s. 10, s. 11, s. 12, s. 13, s. 22, s. 5
Maritime Zones of India Rules, 1982s. Rule 16, s. Rule 8(1)(g)
Sea Customs Act, 1878s. 167(12A)

Subjects

Maritime lawExclusive economic zoneConfiscationStatutory interpretationMandatory provisionFishing regulationsForeign vesselsPenalty

Judgment

CHERN TAONG SHANG & ANR., ETC., ETC.
A
v.
'<'.
COMMANDER S.D. BADAL & ORS.

'r JANUARY 13, 1988.

[B.C. RAY & K. JAGANNATHA SHETTY. JJ.I B

Maritime Zones of India Act, 1981-Maritime Zones of India
)' Rules, 1982-Interpretation-Applicability of the provisions of-Section
13 of the Act-Whether mandatory.
)

-f The facts and issues involved in all these appeals were similar.
c
Criminal Appeals Nos. 644-45·87 and Criminal Appeals Nos. 642-
43 87 were against the judgment and order of the High Court of
"Y Bombay, dismissing the Criminal Appeal filed by masters of two
trawlers against their conviction and sentence and allowing the appeal
filed by Commander S.D. Baijal against the acquittal of accused Nos. 3 D
and 4, i.e. the Charterer Company and its Managing Director and also
_, releasing the trawlers. The High Court convicted the accused Nos. 3
and 4 for contravention of sub-section 6 of section 5 of the Maritime
Zones of India Act, 1981 (M.Z.I. Act) read with section 7 thereof and
rule 16 of the Maritime Zones of India Rules 1981, (M.Z.I. Rules). The
High Court also ordered confiscation of the two trawlers, vesting the E
'( same in favour of the Central Government under section l3 of the
'M.Z.I. Act .
..... The two trawlers involved-foreign vessels-were chartered by
~
(
the respondents Nos. 4 & 5 herein for fishing in Maritime Zone of India
~
after obtaining permit under section 5 of the M.Z.I. Act. The trawlers F
(-.
along with three other pairs of trawlers were apprehended and seized
by the Coast Guard ship commanded by Commander S.D. Baijal for
·r fishing operations in the exclusive economic zone of India, in violation
of the terms and conditions of the permit and the letter of intent granted
to that company by the Government of India under section 5(4) of the
M.Z.1. Act and in violation of the M.Z.I. Rules. They were prosecuted G
by the Additional Chief Metropolitan Magistrate on the complaint filed
-1
by Commander S.D. Baijal as authorised officer under section 19 of the
-.,. M.Z.I. Act. The masters of the trawlers, respondents Nos. 2 and 3,
were convicted and sentenced to pay fines and the other accused respon-
dents Nos. 4 and 5 were acquitted and the trawlers and the fishes
thereon were ordered to be released on payment of the detention H
641
642 SUPREME COURT REPORTS I 1988] 2 S.C.R.

A charges. Of the other three pairs of foreign trawlers chartered by
Indian Company for fishing in the Maritime Zone of India under the
permit granted under the M.Z.I. Act, which were seized and pro- y
secuted, two pairs of trawlers with fishes thereon were ordered to be
confiscated while one pair of these trawlers were directed to be
released. The masters of each pair of trawlers were similarly convicted
B and sentenced to pay fine for violation of the provisions of the said Act
and the Rules thereunder.

The Masters of the pair of trawlers filed a criminal appeal against
their conviction and sentence while the complaining Commander S.D. ....
Baijal filed a criminal appeal against the acquittal of respondent Nos. 4
and 5 i.e. the Managing Director of the company and the company and
c also against the release. of the trawlers in spite of conviction of the
masters under section 12(b) of the M.Z.I. Act. The High Court disposed
of these appeals by a common judgment, allowing the appeal of the
masters in part and modifying their sentence and comicting, in the
appeal filed by S.D. Baijal, the Managing Director and'the Company,
D accused respondents Nos. 3 and 4 and sentencing them to pay fines, and
ordering the trawlers to be confiscated with fishes thereon or the pro-
ceeds thereof in case of sale of the same. The High Court also held the
masters of the trawlers guilty under Rule 8( l)(g) and convicted them
nnder section l2(a) instead of section l2(b) of the M.Z.I. Act, but
maintained the sentence of penalty.
E
Criminal Appeals Nos. 645-47 i87 and Criminal Appeals Nos. 650·
51 of 1987 arose out of a C()mmon judgment of the High Court in two
criminal appeals, modifying in part the judgment and order of the ...
Additional Chief Metropolitan Magistrate, whereby the Magistrate had
convicted the masters of the trawlers, i.e. accused Nos. l and 2 for
F contravening Rule 8(l)(g) read with Rule 16 and section 20(b) of the
M.Z.I. Act and sentenced them to pay fines, in default of payment of
fine, to suffer rigorous imprisonment. The Magistrate also had made an
1
order, confiscating the two trawlers alongwith the fishing gear, equip·
ments, stores, cargo and fish and vesting the same together with the
proceeds of the sale of the fish, if any, with the Central Government.
G The Magistrate had acquitted the accused Nos. 3 and 4 i.e. the +-
Charterer Company and its Managing Director. The criminal appeal
filed by Cdr. S.D. Baijal against the order acquitting the accused Nos. 3
and 4 abovesaid was allowed by the High Court and they were convicted
and sentenced to pay fines etc. The order of confiscation of the two
trawlers was maintained. The criminal appeal filed by the masters of
H the trawlers was dismissed with the modification that the conviction
CHERN TAONG v. COMMANDER S.D. BAJJAL 643

~ made under section 12(b) was altered to one under section 12(a) of the
M.Z.I. Act and the sentence of vigorous imprisonment was modified. A

Criminal Appeals Nos. 648-49187 and Criminal Appeals Nos. 652·
53i87 arose out of a common judgment of the High Court, dismissing
the appeals of the masters of the vessels and allowing the appeals filed
on behalf of the prosecution: All these appeals were filed against the B
'y judgment and order of the Additional Chief Metropolitan Magistrate in
J the Criminal case wherein the Magistrate had convicted and sentenced
·j the masters of the trawlers with the imposition of fines on accused Nos.
l and 2 for contravening Rules 8(l)(g) and 16 of the M.Z.I. Rules and
also of the offence under section 5 of the Act and imposing penalty uis.
( l2(b) of the M.Z.I. Act. The Magistrate had acquitted the accused Nos.
3 and 4 i.e. the Charterer Company and its Managing Director and c
Y directed the release of the trawlers in favour of the masters of the
trawlers. The criminal appeal filed by the masters of the vessels was
dismissed by the High Court and the conviction and sentence u/s l2(b)
of the M.Z.I. Act was altered to one under section 12(a) of the Act. The
criminal appeal filed on behalf of the prosecution was allowed and the D
-~ accused Nos. 3 and 4 i.e. the Charterer Company and its Managing
Director, were convicted and sentenced to pay fine. The vessel and the
fishing equipment were confiscated and directed to vest in favour of the
Central Government .

• Criminal Appeal Nos. 654-55/87 and Criminal Appeal No. 656 of E
1987 arose out of a common judgment and order of the High Court in
the Criminal Appeals filed by the Charterers and the masters of the
:. trawlers, respectively. These appeals were filed against the judgment
"- and order of the Additional Chief Metropolitan Magistrate in a crimi-
\ nal case against the masters of vessel. The Magistrate had convicted and

)~sentenced the accused Nos. l and 2, i.e. the masters of the vessel to pay F
fines; in default to undergo rigorous imprisonment, and had confisca·
ted the trawlers together with fishing gear, equipment, stores, cargo
and fish therein. The criminal appeal of the masters of the trawlers had
been dismissed with a modification of the conviction and sentence pas-
sed under section l2(c) of the M.Z.I. Act was altered to one u/s 12(a) of
-; the Act and the criminal appeal of the Charterers was dismissed with a G
modification of the imprisonment awarded in !)efault of payment of fine
"( imposed on the appellant to simple imprisonment instead of rigorous
imprisonment. The order of confiscation of trawlers passed by the
Magistrate was confirmed.

Dismissing all the appeals, the Court, H
644 SUPREME COURT REPORTS [1988] 2 S.C.R.

HELD: The appellants contended that at the time of the
A
apprehension of the trawlers no fish had been found ou board and there
was no evidence that fish on board was seized or that what had hap-
pened to fish or who had put the fish in the hold of the. trawlers, and
that, therefore, no presumption under section 22 of the Act could be
drawn that the trawlers were engaged in fishing within the exclusive
B economic zone of India in contravention of the provision of the Act and
the Rules framed thereunder. This contention could not he considered y
in appeal by special leave as there had been concurrent findings by the I
Chief Metropolitan Magistrate and the High Court that there was fish k
on board. [649F-H; 650A]
"·
c The main argument on behalf of the appellants was focussed on )
the vital question as to whether the words used in section l3 of the
M.Z.I. Act "shall also be liable to confiscation" mandated that the ·y
foreign vessel used in the commission of the offence would be con-
fiscated as soon as the masters were convicted under section 10 or 11 or
12 of the Act, or it was the discretion of the Court to order either release
D of the vessel or confiscation of the vessel with the fish and the other
equipment, cargo and fishing gear, considering the graveness of the !>-
offence. On an examination of the Objects and Reasons and the various
provisions of the Maritime Zones of India (Regulation of Fishing by
Foreign Vessels) Act, 1981, it was crystal clear that the M.Z.I. Act had
been enacted with the object of preventing illegal poaching of fishes by
E foreign vessels, including foreign vessels chartered by Indian citizens in Y
the exclusive economic zone of India at a depth less than 40 fathoms, by
providing deterrent punishment for contravention of the provisions of ~
the Act to protect Indian fishermen. The objects and reasons were to be "
taken into consideration in interpreting the provisions of the statute. In ,.:.
interpreting a statute, the Court has to ascertain the will and policy of
f. the legislature as discernible from the object and scheme of the enact- ~
men! and the language used therein. Viewed in this context, it was (
apparent that the said Act had been made with the sole purpose of
preventing poaching of fishes by. foreign vessels chartered by Indian
citizens within the exclusive economic zone of India as specified in Rule
8(1)(g) of Maritime Zone oflndia Rules as amended in 1982 as well as in
G breach of the provisions of the said Act and the terms and conditions of •-
the permit issued under section 5 of the said Act. [650E-G; 6SJD; 654F]

Section 13 of the Act expressly says that besides the conviction and
sentence of the masters of the vessels, and charterers, the vessel is liable
to be confiscated with fishes therein. The appellants' contention was
H that the words "shall also he liable to confiscation" used in section 13 of
CHERN TAONG v. COMMANDER S.D. BAIJAL 645

the Act did not mean that it was mandatory to confiscate the vessel as
the masters of the vessel had been convicted and sentenced to pay pen- A
alty under section 12 of the Act, and as various punishments had been
provided for different types of offences, it was left to the discretion of
the court to order confiscation of the vessel or to release the vessel. l655A-C]

Section 13 in clear an!l unimhiguous terms says that on the convic- B
lion of the master and the charterer of an offence under &ection to or 11
or 12, the vessel used in connection with the offence together with the
fish on board such ship or the sale proceeds of such fish, and stores,
cargo shall also be liable to confiscation. Viewed in the context, the
words "shall also be liable to be confiscation" do not leave any discre-
tion to the Magistrate or the court to make no order of confiscation of
the vessel as soon as the masters of the vessel were convicted u/s to or 1I C
or 12 of the Act. The Legislative intent in making this provision was to
provide deterrent punishment to prohibit fishing in the exclusive
economic zone oflndia by foreign vessels in infringement of the Act and
the rules framed thereunder and the conditions of the permit or licence.
Viewed in this context, section 13 mandates that on conviction of the o
master and the charterer of an offence under section 12, not only pen-
alty of fine would be imposed, the vessel used in or in connection with
the commission of such offence has to be confiscated. It is not open to
the court to consider the graveness of the offence and other extenuating
circumstances and to make no order for confiscation of the offending
vessel concerned. Confiscation of the vessel is the immediate statutory E
consequence of the finding that an offence either under section to or 11
• or 12 has been proved and the master of the vessel has been convicted.
Section 13 is thus mandatory and it is not open to the court to refrain
from making an order, confiscating the offending vessel as soon as the
\.._, masters of the vessel are convicted of an offence under section 12 and
awarded penalty. l660BF] F
l
The judgments and orders of the Hi~h Court were affirmed. The
vessels had been detained in Bombay Port after apprehending them on
July 26, 1984 and a huge amount had to be paid as port charges.
Considering the facts and circumstances of the case, the Port Authori-
ties at Bombay might consider if an application was made hy the parties G
for exemption or partial exemption of the same favourably in view of
the order of confIScation of the trawlers. l660G-H]

State of Madhya Pradesh v. Asad Bharat Finance Co. & Anr.,
11966] Sopp. SCR 473; lndo-China Steam Navigation Co. Ltd. v. Jasjit
Singh, Add/. Collector of Customs & Ors., 11964] 6 SCR 594; 14:
646 SUPREME COURT REPORTS [1988] 2 S.C.R.

A Superintendent and Legal Remembrancer of Legal Affairs to the Govt.
of West Bengal v. Abani Maity, [1979] 3 SCR 472; K.P. Verghese
v. The Income-tax Officer, Ernakulam and another, 11982] l SCR 629
and F.N. Roy v. Collector of Customs, Calcutta, [1957] SCR 1151,
referred to.

B CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
Nos. 642-656 of 1987.

From the Judgment and Order dated 24.4.1987 of the High
Court of Bombay in Crimin.al Appeal Nos. 495, 496, 497, 660, 635, 636 ...
and 637 of 1986.
c A.K. Sen, A.K. Goel, Ajit Pudussery and M.D. Rijhwani for
the Appellants.

M.K. Banerjee, Solicitor General, A.K. Ganguli, Hemant
Sharma, R.P. Srivastave, C. Ramesh and C.V. Subba Rao for the
D Respondents.

The Judgment of the Court was delivered by

RAY, J. Crl. A. Nos. 644-45/87 and Crl. A. Nos. 642-43/87.

E These appeals by special leave are against the judgment and
order dated 24th April, 1987 passed by the High Court of Bombay
dismissing criminal appeal No. 636 of 1986 filed by masters of two
trawlers against their convict'0n and sentence and allowing appeal No.
·-
496 of 1986 filed by Commander S.D. Baijal against the acquittal of
accused Nos. 3 and 4, i.e. the charterer company and its managing
F Director and also releasing the trawlers. The High Court convicted the
accused Nos. 3 and 4 for contravention of sub-section 6 of section 5 of
the Maritime Zones of India Act, 1981 read with section 7 thereof and
rule 16 of Maritime Zones of India Rules, 1982. The High Court also
ordered confiscation of the two trawlers and to vest the same in favour
of Central Government under section 13 of the Maritime Zones of
G India Act.

The trawlers in questions which are foreign vessel are chartered
by respondent Nos. 4 and 5 of this appeal for the purpose of fishing in
Maritime Zone of India after obtaining permit under section 5 of
Maritime Zones of India Act, in short M.Z.I. Act. These two trawlers
H along with three other pairs ohrawlers were apprehended and seized
CHERN TAONG v. COMMANDER S.D. BAUAL (RAY, J.J 647

by Coast Guard Ship Vikram commanded by Commander S.D. Baijal
A
for fishing operations in the ·exclusive economic zone of India in viola-
'1 tion of the terms and conditions of permit and the letter of intent
granted to that company by the Government of India under section
5(4) of M.Z.I. Act and in violation of Maritime Zones of India Rules,
in short M.Z.I. Rules, 1982 as amended., They were prosecuted by
Additional Chief Metropolitan Magistrate, 8th Court Ballard Estate, B
Y Bombay on the complaint of Commander S.D. Baijal filed as
authorised officer under section 19 of the M .Z .I. Act. The masters of
"" the two trawlers, the respondent Nos. 2 and 3 of this appeal were
,.., convicted and sentenced to pay a fine of Rs.60,000 and Rs.40,000
,,(- respectively and the other accused respondents Nos. 4 and 5 were
~ acquitted and the trawlers and the fishes thereon were ordered to be
f released on payment of the detention charges. Of the other three pairs c
of foreign trawlers chartered by Indian company for fishing in the
Maritime Zone of India under permit granted under M.Z.I. Act which
were seized and prosecuted, two pairs of trawlers with fishes thereon
were ordered to be confiscated while one pair of these trawlers were
-cl directed to be released. The masters of each pair of trawler were D
similarly convicted and sentenced to pay fine for violation of provi-
sions of the said Act and the Rules framed thereunder.
The masters of the pair of trawlers filed criminal appeal No. 536
''( of 1986 against their conviction and sentence while the complaining
Commander S.D. Baijal filed criminal appeal No. 496 of 1986 against
the order of acquittal of respondent Nos. 4 and 5 i.e. the Managing E
- Director of the Company and the Company and also against the release
> of the pair of trawlers in spite of conviction of the masters under section
< 12(b) of M.Z.I. Act by the Magistrate. These two appeals were heard
together and disposed of by a common judgment by the High Court,
{~Ombay whereby criminal appeal No. 636 of 1986 was allowed in part
~ by modifying the sentence of the masters of the trawlers from R.I. for F
one year to S.I. for 9 months and from R.I. for 9 months to S.I. for 6
months. In criminal appeal No. 496 of 1986 the accused respondent
Nos. 3 and 4 i.e. the Managing Director and the Company were con-
victed and sentenced to pay a fine of Rs.30,000 each and the trawlers
-; were ordered to be confiscated with the fishes thereon or in case of
sale of the same the proceeds thereof. The High Court also held the G
'r masters of trawlers guilty under Rule 8(1)(q) and they were convicted
under section 12(a) instead of section 12(b) of the M.Z.I. Act but
maintained the sentence of penalty.

It is against this judgment and order the instant appeals on
H
special leave have been filed.
648 SUPREME COURT REPORTS I1988] 2 S.C.R.

A Crl. A. Nos. 646-47 of 87 and Crl. A. Nos. 650-51of1987 arise.out
of a common judgment made by the High Court of Bombay on April ~
24, 1987 modifying in part the judgment and order made by the Addi-
tional Chief Metropolitan Magistrate, 38th Court, Ballard Estate,
Bombay in Criminal Case No. 28 of 1984 passed in Criminal Appeal
N os. 497 and 637 of 1986. The Additional Chief Metropolitan Magis-
B trate convicted the masters of the trawlers i.e. accused Nos. 1 and 2 for y
contravening Rule 8(1)(G) read with Rule 16 and Section 20(b) of

C
M.Z.I. Act and sentenced them to pay a fine of Rs.60,000 and t
Rs.40.000 respectively; in default of payment of fine to suffer R.I. for
I year and 9 months respectively. The Magistrate also made an order ~
confiscating the trawlers HANN TAI No. 301 and JIANN TAI No. 1'
302 along with the fishing gear, equipments, stores, cargo and fish and •_
-
directed that the same shall vest with the Central Government 1
together with the proceeds of the sale of fish, if any, under order of the
Court. The Magistrate however. acquitted accused Nos. 3 and 4, i.e.
the Charterer Company and its Managing Director. Crl. A. No. 497 of
1986 filed by Cdr. S.D. Baijal against the order acquitting accused
D i'<os. 3 and 4, i.e. Charterer Company and its Managing Director was
allowed by the High Court of Bombay and they were convicted and
sentenced to pay a fine of Rs.30,000 each; in default to suffer S.I. for 4
months. The order of confiscation of the two trawlers was also
maintained. Crl. A. No. 637/86 filed by the masters of the trawlers was
dismissed with the modification that the conviction made u/s 12(b) was ·y-
E altered to l2(a) of M.Z.l. Act and the sentence of R.I. for I year and 9
months respectively in default payment of fine were modified as S.I.
for 6 months and 5 months respectively.

Crl. A. Nos. 648-49 87 and Crl. A. Nos. 652-53 of 1987 arise out
of a common judgment passed in Criminal Appeal Nos. 495 and 634 of,._i.,
F !986 by the High Court of Bombay on 24th April, 1987 dismissing the ·~
appeals of the masters of the vessels and allowing the appeals filed on
behalf of the prosecution. All these aforesaid appeals were filed
against the judgment arid order passed by the Additional Chief
Metropolitan Magistrate in Criminal Case No. 27 of 1984 wherein the
Magistrate convicted and sentenced the masters of the trawlers with •-
G the imposition of fine of Rs.30,000 and Rs.40,000 on accused Nos. I
and 2 respectively for contravening Rule 8(1)(g) and Rule 16 of the Y
M.Z.I. Rules and also of the offence u/s 5 of the Act and imposing
penalty u/s 12(b) of the M.Z.I. Act. The Magistrate, however, acquit-
ted the accused Nos. 3 and 4 i.e. the Charterer Company and its
Managing Director and directed the release of the trawlers in favour of
H the masters of these trawlers. The Crl. A. No. 634 of 1986 filed by the
CHERN TAONG·v. COMMANDER S.D. BAIJAL [RAY, J.) 649
-1
masters of the vessels was dismissed by the High Court of Bombay and
A
the convinction and sentence u/s 12(b) of M.Z.I. Act was altered to
"i one u/s 12(a) of the said Act. Crl. A. No. 495 of 1986 filed on behalf of
the prosecution was allowed and the accused Nos. 3 and 4 i.e. the
Charterer Company as well as the Managing Director of the Company
were convicted and sentenced to pay a fine of Rs.30,000. The vessel as
well as the fishing equipment were confiscated and the same were B
Y directed to vest in favour of the Central Government.

Crl. A. Nos. 654-55 of 87 and Crl. A. No. 666 of 1987 arise out of a
common judgment and order passed by the High co.Ort of Bombay in
J-- Crl. Appeal Nos. 660 and 635 of 1986. These criminal appeals were
. . filed against the judgment and order passed in criminal case No. 26 of
1984 made on 2ist May, 1986 by the Additional Chief Metropolitan
c
-'f Magistrate, 38th Court, Ballard Estate. The Magistrate convicted and
sentenced the accused Nos. 1 and 2 i.e. the masters of the vessel to pay
a fine of Rs.60,000 and Rs.40,000 respectively; in default to undergo
R.I. for 1 year and 9 months respectively.The Magistrate also made an
order confiscating the trawlers BWA Sheng No. 21 and HQA Sheng D
No. 22 together with fishing gear, equipment, stores, cargo and fish
therein. Crl. A. No. 660/86 was filed by the Charterers, Crl. A. No. 635
of 1986 was filed by the masters of the trawlers. Crl. A. No. 635 of 1986
was dismissed with the modification that conviction and sentence pas-
"f sed u/s J2(b) of the M .Z .I. Act was altered to one u/s 12(a) of the said
Act and Crl. A. No. 660 of 1986 was dismissed with the modification E
that the imprisonment awarded in default of payment of fine imposed
on the appellant was altered to S.I. for 4 months instead of R.I. for 6
months. The order of confiscation of trawlers passed by the Magistrate
~ was also confirmed.

The facts and issues involved in all these appeals being similar we F
dispose of these appeals by a common judgment.

It has been first contended on behalf of the appellant that at the
time of apprehension of the trawlers no fish was found on board and
the net was not wet. There was no evidence that fish on board was
seized nor there was any evidence to show what had happened to fish G
or who put the fish in the hold of the trawlers. It has, therefore, been
submitted that no presumption under section 22 of the said Act can be
drawn that the trewlers were engaged in fishing within the exclusive
economic zone of India in contravention of the provisions of the Act
and the Rules framed thereunder. This contention cannot be considered
in this appeal under special leave as there has been concurrent findings H

I
650 SUPREME COURT REPORTS [1988] 2 S.C.R.

A by the Chief Metropolitan Magistrate as well as by the High Court that )--
there was f'sh on board which includes the hold of the trawlers. The
learned single Judge observed: .,

"I am, however., unable to accept that for a minor omission
to make entry of finding of .the fish or the net in the offic-
B ers' diary. can by itself negative the evidence of actual find-
ing of the fish and the wet net on the deck and in my view 'f
the Authority quoted will have no application to the facts
of this case." l'
The High Court furtber·held on a consideration of the evidence~
that the fishing trawlers were fishing in a depth within40 fathoms and •
c the finding of the Magistrate on this score is unassailable. There has '_
been violation of amended Rule S(l)(q) of M.Z.I. .Rules. Condition r
2(5) of the permit·provides that any condition could be imposed which
would be binding on the charterers, masters of the trawlers. Rule
8( l)(q) requires the trawlers to fish at a depth of more .than 40
D fathoms. This condition in the permit has been violated. The masters
and the charterers have been accordingly, convicted under section ""·
12(a) by the High Court as the violation is with regard to the area of
operation specified in the permit and the penalty provided for the
same is.not exceeding Rs.5 lakhs. As the Magistrate has exercised his
discretion in sentencing th.e masters to paylesser amount as penalty Y
E the High 'Court did not consider it proper to interfere with the same.

The main argument on behalf of the appellant was focussed on
the vital question as to whether the words used in Section 13 of M.Z.I.
Act "shall also be liable to confiscation" mandate that the foreign ~
'<essel used in connection with the commission of the offence as soon as >--I
F the masters have been convicted under section 10 or 11 or 12 of the ,,
said Act, shall be confiscated or it is the discretion of the Court to ~
order either for release of the vessel or for confiscation of the vessel
together with the fish and other equipment, cargo and fishing gear
considering the graveness of the offence. It has been strenuously urged
before us that the object of the M.Z.I. Act is to prevent poaching of
G fishes in the exclusive economic zone of India by foreign vessels with- ,._
out any licence or permit as required under the said Act. Section 10
provides that where a vessel contravenes the provisions of Section 3. Y
the owner or master of the vessel shall be punishable for imprisonment
for a term not exceeding 3 years or with a fine not exceeding Rs.15
lakhs; Where the contravention takes place in an area within the exclu-
H sive economic zone of India, the punishment of fine will not exceed
CHERN TAONG v. COMMANDER S.D. BAIJAL [RAY, J.] 651
--(
rupees ten lakhs. Similarly for contravention of licence the punishment A
of fine will not exceed rupees ten lakhs whereas in case of contraven-
tion of the provisions of the permit in respect of the area of operation
or method of fishing, the punishment of fine will not exceed rupees
five lakhs and in any other case the punishment of fine will not exceed
rupees fifty thousand. Referring to these provisions providing for dif-
ferent kinds of penalty, it has been urged that the confiscation of the B
Y vessel for contravention of the permit is not warranted in as much as
the punishment provided for such contravention u/s 12 is much less

.. than the punishment provided for in respect of contravention of
licence as well as contravention of Section 3 of the said Act. It has,
C therefore, been submitted that the provisions of Section 13 bf the said
• Act are not mandatory but directory. This leaves option to the Court
to use its discretion to pass an order of confiscation of vessel in the
c
facts and circumstances of the case. The trawlers in question were
chartered by the company and the company duly obtained permit
under Section 5 of M.Z.I. Act, 1981 for fishing in economic zones of
India at a depth of not less than 40 fathoms. It has been submitted that
it is not possible to fish at the said depth as depth varies from place to D
place and for such a minor infringement the penalty of confiscation of
the vessel i.e. the fishing trawlers should not be awarded as the
trawlers are fishing in the maritime zone of India under permit granted
by the Government of India in favour of the Indian company which
chartered those trawlers. Moreover, different penalties are prescribed
for different offences committed under sections 10, 11 and 12 of E
___ JI(
M.Z.I. Act according to the graveness of the offence. The penalty of
confiscation of the vessel under Section 13 if found to be imperative,
the provisions will be arbitrary. The words "shall also be liable to
confiscation" in Section 13 of the said Act have to be interpretted as
>--, not mandatory in the context they have been used but discretionary. It
{ ·- is left to the discretion of the Court to award this sentence of confisca- F
'I tion in case of commission of grave offences. In support of this submis-
sion the decisions in State of Madhya Pradesh v. Azad Bharat Finance
Co. & Anr., [1966] (Sup!;) SCR 473; Indo-China Steam Navigation Co.
Ltd. v. Jasjit Singh, Add/. Collector of Customs & Ors., [1964] 6 SCR
594 and Superintendent and Legal Remembrancer of Legal Affairs to
the Govt. of West Bengal v. Abani Maity, [1979] 3 SCR 472 have been G
cited at the bar wherein similar words "shall also be liable to confisca-
tion" have been used.
It is convenient to ascertain the legal position before deciding the
question raised. In the Statement of Objects and Reasons of The
Maritime Zones of India (Regulation of Fishing by Foreign Vessels) H
Act, 1981 it is stated:
652 SUPREME COURT REPORTS I1988] 2 S.C.R.

A "There has been an increase in poaching activities of
foreign fishing vessels in our exclusive economic zone.
There have also been instances of foreign fishing vessels
chartered by Indian parties indulging in such activities. To
prevent such activities and to protect our fishermen from
the hardship caused by poaching vessels, it is necessary to
B regulate fishing activities by foreign fishing vessels and to
provide for deterrent punishment by way of heavy fines and '(
confiscation of foreign fishing vessels engaged in such \
activities." t
...
Section 2(a) defines "exclusive economic zone of India" as mean-
c ing the exclusive zone of India in accordance with the provisions of
section 7 of the Territorial Waters, Continental Shelf, Exclusive
~
'
~,_

Economic Zone and other Maritime Zones Act, 1976.

According to Section 2(i) "owner" of vessel a includes any
association of persons whether incorporated or not, by whom the ves-
D sel is owned or chartered;

Section 2(i) defines "permit" meaning a permit granted or
deemed to have been granted under section 5.

Section 3 states that subject to the provisions of the act, no y
E foreign vessel shall, except under and in accordance with:

(a) a licence granted under section 4; or •

(b) a permit granted under section 5,
by the Central Government, be used for fishing within any~.-;\
F maritime zone of India.
\
Section 4 provides for proced11re for making application for
licence by the owner of a foreign vessel for fishing within any maritime
zone of India and grant of licence by Central Government.

G Section 5 prohibits fishing by Indian citizens using foreign vessels
within any maritime zone of India without obtaining permit and the
procedur~ for grant of permit to charterer has been specified therein.

Sub-section (6) of Section 5 of the Act provides:

H "A person holding a permit under this section shall ensure
CHERN TAONG v. COMMANDER S.D. BAIJAL {RAY, J.] 653

that every person employed by him complies, in the course A
of such employment, with the provisions of this Act or any
rule or order made thereunder and the conditions of such
permit."

Section 10 says that for contravention of provisions of Section 3,
the owner of master of the vessel: B

(a) in case of contravention of territorial waters of India shall be
punishable with imprisonment for a term not exceeding three
years or with fine not exceeding rupees fifteen lakh or with both;
and

'
-i
(b) in a case where contravention takes place in any area within
the exclusive economic zone of India, shall be punishable with
fine not exceeding rupees ten lakh.

Section 11 prescribes punishment of fine not exceeding rupees
c

ten lakhs in case of contravention of licence. D

Section 12(a) prescribes punishment of fine not exceeding rupees
five lakhs where the contravention relates to the area of operation or
method of fishing specified in the permit and; section 12(b) in any
other case with fine not exceeding rupees fifty thousand.

-
E
Section 13 which is relevant for deciding these appeals 1s as
under:
•
"Confiscation of vessels, etc.-(!) Where any person is
convicted of an offence under section 10 or section 11 or
section 12, the foreign vessel used in or in connection with F
the commission of the said offence, together with its fishing
gear, equipment, stores and cargo and any fish on board
such ship or the proceeds of the sale of any fish ordered to
be sold under the second proviso to clause (a) or sub-
section (4) of section 9 shall also be liable to confiscation.
(2) the foreign vessel or other things confiscated under sub- G
section (1) shall vest in the Central Government."

Other provisions of the said Act are not necessary for our
purpose and as such they are not stated herein.

Thus, it is crystal clear that the M.Z.I. Act has been enacted with H
654 SUPREME COURT REPORTS I1988] 2 S.C.R.

the object of preventing illegal poaching of fishes by foreign vessels
A
including foreign vessels chartered by Indian parties by providing det·
errent punishment to protect Indian fishermen. The objects and
reasons of the Act are to be taken into consideration in interpreting
the provisions of the Statute and not the debates in Parliament on the
Bill. This has been observed by this Court in K.P. Varghese v. The
B Income-tax Officer, Ernakulam and another, 119821 1 SCR 629 as
under:

"Now it is true that the speeches made by the Members of
the Legislature on the floor of the House when a Bill for
enacting a statutory provision is being debated are inadmis·
sible for the purpose of interpreting the statutory provision
c but the speech made by the Mover of the Bill explaining the
reason for the introduction of the Bill can certainly be
referred to for the purpose of ascertaining the mischief
sought to be remedied by the legislation and the object and
purpose for which the legislation is enacted. This is in
D accord with the recent trend in juristic thought not only in
western countries but also in India that interpretation of a
statute being an exercise in the ascertainment of meaning,
everything which is logically relevant should be admissible
"
y
E It is pertinent to mention that in interpreting a statute the Court
has to ascertain the will and policy of the legislature as discernible
from the object and scheme of the enactment and the language used
therein. Viewed in this context it is apparent that the said Act has been
made with the sole purpose of preventing poaching of fishes by foreign
vessels chartered by Indian citizens within the exclusive economic zone -~
F oflndia as specified in Rule 8(1)(q) of Maritime Zone of Tndia Rules as \
amended in 1982 as well as in breach of the provisions of the said Act
and the terms and conditions of permit issued under Section 5 of the
said Act.

Section 8 under the heading "Prohibition of fishing in Maritime
G Zone of India by foreign vessels" expressly prohibits foreign vessels
from fishing in maritime zone of India except under and in accordance
with a licence or permit granted by Central Government and breach of
the same has been made punishable under Section 10 of the said Act.
Similarly violation of the terms and conditions of licence and permit
granted under Sections 4 or 5 is punishable under Sections 11 or 12
H respectively of the said Act.
CHERN TAONG v. COMMANDER S.D. BAIJAL (RAY, J.] 655

Section 13 of the said Act expressly says that besides conviction A
and sentence of the masters of the vessels and charterers, the vessel is
liable to be confiscated with fishes therein.

The contention on behalf of the appellants is that the words
"shall also be liable to confiscation" as used in Section 13 of the said
Act do not mean that it is mandatory to confiscate the vessel, i.e. the B
trawlers as the masters of the vessel have been convicted and sen-
tenced to pay penalty under section 12 of the Act. As various punish-
ments have been provided for different types of offences, it is left to
the discretion of the court to order confiscation of the vessel or to
release the vessel.

In the case of lndo-China Steam Navigation Co. Ltd. v. Jasjit C
Singh, Additional Collector of Customs & Ors., [1964) 6 SCR 594 the
foreign vessel 'Eastern Saga' arrived at Calcutta from the Far East
carrying a legitimate cargo. On its arrival at the port the Customs
Officers on search found a hole in sailors' accommodation which was
covered with a piece of wood and over-painted. From the hole the D
Customs Officers found out a large quantity of gold in bars valued at
about Rs.23 lakhs. The Additional Collector of Custom found that the
vessel had clearly rendered itself liable to confiscation under section
167(12A) of Sea Customs Act, 1878 because it had infringed the provi-
sions of Section 52A of the said Act. He also confiscated the gold bars
under Section 167(8) read with Section 23A of the Foreign Exchange E
Regulations Act. He also directed that 'Eastern Saga' be confiScated
u/s 167(12A) of the said Act and in lieu of confiscation he gave the
.. owners of the ship an opportunity to pay a fine of Rs.25 lakhs within a
• period of 30 days of the despatch of the order. This order was chal-

rJ
lenged in an appeal under special leave before this Court. Section
167(12A) provides that if a vessel contravenes section 52A it "shall be F
liable to confiscation". It was held:

" ..... The context seems to require that it is not open to
the Customs to refuse to confiscate the vessel on the ground
that there are any extenuating circumstances surrounding
the contravention of Section 52A in a given case and that it G
would be unfair to impose the penalty of confiscation. Two
penalties are prescribed, one is the confiscation of the ship,
and the other is a fine against the master. In regard to the
latter penalty it is within the discretion of the Customs
Authority to decide what amount of penalty should be
imposed; just as in the case of the first penalty it is not open H
656 SUPREME COURT REPORTS [1988) 2 S.C.R.

A to it to say that it would not impose the penalty of confisca-
tion against the offending ship, so in the case of the second
penalty it is not open to it to say that it will not levy any
penalty against the master .......... It must be regarded
as an elementary requirement of clause 12A that as soon as
the offence referred to in column I of the said clause is
B proved, some penalty has to be imposed and clause 12A
indicates that two penalties have to be imposed and not one
there being discretion in regard to the penalty imposable
against the master as regards the amount of the said pen-
alty. Therefore, we do not think it would be possible to
take the view that if there are extenuating circumstances
attending the contravention of Section 52A in a given case
c the Customs Authority can refrain. from confiscating the
vessel. Confiscation of the vessel is the immediate statutory
consequence of the finding that an offence under clause
12A is established, just as the imposition of some penalty
against the master is another statutory consequence of the
D same contravention."

Section 183 lays down that whenever an order of confiscation is
made the Adjudicating Authority has to give the owner of the goods
which includes the vessel, an opportunity to pay fine in lieu of confis-
cation. Section 183 confers discretion on the Authority to determine
E what amount of fine should be imposed.

Section 11 of the M.P. Opium Act as amended where the words
"shall be liable to confiscation" occurred came up for consideration
before this Court in the case of State of Madhya Pradesh v. Azad ,.>
-
Bharat Finance Co. Ltd. & Anr., [1966) (Supp) SCR 473 a truck hired,,;-,<
F by one Harbhajan Singh from the respondent company was found on ~
search to have contained contraband opium. Harbhajan Singh was ~
tried for offences u/s 9A and 9B of the Opium Act (10 of 1979). The
Magistrate while acquitting him on the ground that he had no
knowledge, ordered for confiscation of the truck as the word "shall"
occurring in Section 11 of the Act make it mandatory to confiscate.
G Sessions Judge on revision affirmed the order of the Magistrate. High
Court on revision held that the words "shall be liable to confiscation"
in section 11 did not mean that it was mandatory to confiscate. It is the
discretion of the Court whether to make an order for confiscation of
the conveyance or not according to the facts and circumstances of the
case. This Court had observed that provisions of Section 11 of the
H Madhya Bharat Act are permissive and not obligatory. Three factors
CHERN TAONG v. COMMANDER S.D. BAIJAL [RAY, J.[ 657

were taken into consideration in construing Section 11. "First, it would A
be unjust to confiscate the truck of a person if he has no knowledge
whatsoever that the truck was being used for transporting the opium.
Secondly, it is a penal statute and it should if possible be construed in
such a way that a person who has not committed or abetted any off-
ence should not be visited with a penalty. Thirdly, if confiscation was
obligatory under the section, the section may have to be struck down B
y as imposing an unreasonable restriction under Article 19 of the
Constitution.

Section 11 of the Madhya Bharat Act is not therefore to be
construed as obligatory and it is for the court to consider in each case
whether the articles in which the contraband opium is found or it being
transported should be confiscated or not having regard to all the
c
circumstances of the case."

The earlier decision of this Court has not been referred to in this
case. Moreover what appears to have weighed with this court was that
unless the owner of the truck knew that hirer used the truck in trans- D
porting contraband opium it would be unjust to confiscate the con-
veyance. In the instant case the owner of the vessel has been defined in
Section 2(i) of M.Z.I. Act as including any association of persons,
whether incorporated or not, by whom the vessel is owned or
chartered. The charterer company and its Managing Director, have

-
been convicted for contravention of Section 5 of the Act and Rule E
8(1)(q) of the Rules framed thereunder and penalty has been awarded.
So the charterer who is deemed to be the owner of the trawler was held
guilty of the offence of breach of terms of the permit.

,.....,_. In the case of Superintendent and Legal Remembrancer of Legal
' Affairs to the Govt. of West Bengal v. Abani Haity, [1979] 3 SCR 472 F
the car belonging to Abani Haity was searched and contraband ganja
was found concealed in the car owned by Abani Haity. The Magistrate
passed order of conviction and sentence against him but he did not
make any order for confiscation of the car used for transporting the
contraband article. This matter ultimately came up before this Court
in an appeal by special leave. This Court held on an interpretation of G
Section 63(1) of the Bengal Excise Act, 1909 that the words "shall be
liable to confiscaticn" as used in the context convey an absolute
imperative to confiscate the vehicle used for transport of the con-
traband goods. It was further held that it is incumbent on the Magis-
trate to pass, at the conclusion of the trial, in addition to the conviction
and sentence, an order of confiscation of the car by which such offence H
658 SUPREME COURT REPORTS I1988] 2 S.C.R.
A has been committed. The word "liable" occurring in many statutes,
has been held as not conveying the sense of an absolute obligation or
penalty but merely importing a possibility of attracting such obliga-
tion, or penalty even where this word is used along with the words
"shall be". Thus, where an American Revenue Statute declared that
for the commission of a certain act, a vessel "shall be liable to forfei-
B ture", it has held that "these words do not effect a present absolute
forfeiture but only give a right to have the vessel forfeited under due
process of law. Similarly, it has been held that in Section 302, Indian
Penal Code, the phrase, "shall also be liable to fine" does not convey a
mandate but leave it to the discretion of the Court convicting an
accused of the offence of murder to impose or not to impose fine in
addition to the sentence of death or transportation for life."
c
In the case of F.N. Roy v. Collector of Customs, Calcutta, [1957]
S.C.R 1151 the petitioner on the basis of a notification dated March
16, 1953 issued by the Government of India giving general permission
to all persons to import into India from certain countries any goods of
D any of the description specified in the schedule annexecl to the notifica-
tion had placed an order with a company in Japan for supply of certain
goods called in the trade Zip Chains. The goods on arrival in Calcutta
Port could not be cleared from the Port as a notice was issued by the
Collector of Customs for Appraisement stating that the petitioner did
not possess valid import licence for the goods and asked him to show
E cause why the same should not be confiscated and action taken against
the petitioner u/s 167(8) of the Sea Customs Act. The petitioner sub-
mitted a written answer stating that the Zip Chains imported by him
were chains of the kind free import of which has been permitted and as
such no licence to import them was necessary. The petitioner was
again asked by the Customs authorities whether he wanted a personal
F hearing. The petitioner did not reply to the same. The Collector of
Customs made an order confiscated the goods and imposing a penalty
of Rs.1,000 on the petitioner. The petitioner thereafter filed an appeal
which was dismissed on the ground that it was barred by limitation.
The petitioner thereafter made an application for quashing the order
of confiscation of goods and imposing penalty on him. This application
G was dismissed. The petitioner thereafter filed an application under
Article 32 of the Constitution challenging the validity of the order
made against him. The order of confiscation was questioned on the
ground that it did not give the petitioner an option to pay a fine in lieu
of confiscation, as provided in Section 183 of the Sea Customs Act.
•
The Imports and Exports (Control) Act, 1947 by Section 3( 1) empow-
H ers the Central Government to make provisions for prohibiting,
CHERN TAONG v. COMMANDER S.D. BAIJAL [RAY, J.J 659

restricting or otherwise controlling, in all cases or in specified classes A
of cases, the import, export, carriage coastwise or shipment as ships'
stores of goods of any specified description. Sub-section (2) of that
Section provided that all goods to which any order under sub-section
( 1) applies shall be deemed to be goods of which the import or export
has been prohibited or restricted under section 19 of the Sea Customs,
'Y 1878, and all the provisions of that Act shall have effect accordingly, B
, except that section 183 thereof shall have effect as if for the word
"shall" therein the word "may" was substituted.

- {
, It was held that the goods imported into India contrary to the
prohibition or restriction shall be liable to confiscation and any person
concerned in such importation shall be liable to a penalty not exceed- c
ing three times the value of the goods or not exceeding one thousand
rupees. Under Section 167(8) of the Sea Customs Act the provisions of
confiscation of goods illegally imported are mandatory. The only ques-
tion adjudicated before this Court was that as no option was given to
pay fine in lieu of confiscation u/s 183 of the Sea Customs Act, the
order should be held bad. It was held that in view of the substitution of D
the word 'may' in place of 'shall' in Section 183 of the Sea Customs
Act, it has been left to the discretion of the Customs Authorities to give
or not to give the option to pay1fine. It was held that it was obligatory
on the part of the Customs Authorities to make an order confiscating
the goods illegally imported in violation of the provisions of the Act.
E
The objects and reasons of the M.Z.I. Act are to prevent illegal
,. poaching of fishes by foreign vessels chartered by Indian citizens in the
._ exclusive economic zone of India at a depth less than 40 fathoms by
providing deterrent punishment for contravention of the provisions of
~he Act in order to protect and safeguard' the interests of India
' J fishermen. F

Chapter II of the Act deals with Regulation of fishing by foreign
vessels. The heading of Section 3 is "Prohibiting of Fishing in Mari-
time Zones of India by Foreign Vessels". Thus Section 3 prohibits the
use of foreign vessels for fishing within any maritime zone of India
without licence or permit granted by the Central Government and also G
in accordance with the terms mentioned in the licence or permit. Sec-
tion· 5 under the caption 'Prohibition of Fishing by Indian Citizens'
using foreign vessels clearly en joins in sub-section 6 that a person
holding permit shall ensure that every person employed by him comp-
lies, in the course of such employment with the provisions of the act or
any rule or order made thereunder and the conditions of such permit. H
660 SUPREME COURT REPORTS [1988] 2 S.C.R.
')-
A Rule 8(1)(q) inserted by M.Z.I. Rules as amended in 1982 expressely
prohibits fishing by foreign vessel chartered by Indian citizens in a
depth less than 40 fathoms in any exclusive economic zone of India. ;....
Infringement of this rule as well as violation of the provisions of Sec-
tion 5 of the Act and the conditions of permit will make the masters of
the vessel as well as the company and the Managing Director or Secret-
B ary of the Company chartering the vessel liable to conviction and
sentence of penalty expressly provided in section 12 of the said Act.
Section 13 also in clear and unambiguous terms says that on the convic-
tion of the person i.e. the master and the charterer of an offence under
Sections 10 or 11 or 12 the vessel used in connection with the offence
together with the fish on board such ship or the sale proceeds of the ~
sale of such fish, stores, cargo shall also be liable to confiscation. #,
c Viewed in the context the words "shall also be liable to confiscation" ').-
do not leave any discretion to the Magistrate or the court to make no
order of confiscation of the vessel as soon as the masters of the vessel
are convicted u/s 10 or 11 or 12 of the said Act. The Legislative intent
in making this provision is to provide deterrent punishment to prohibit
D fishing in exclusive economic zone of India by foreign vessel in infring-
ement of the Act and the rules framed thereunder and the conditions
of permit or licence. Viewed in this context Section 13 mandates that
on conviction of the master and charterer of an offence under Section
12 not only penalty of fine shall be imposed but the vessel used in or in'
connection with the commission of such offence has to be confiscated. y
E It is not open to the Court to consider the graveness of the offence and
other extenuating circumstances and to make no order for confiscation
of the offending vessel concerned. Confiscation of the vessel is the
immediate statutory consequence of the findin~ that an offence either
under Section 10 or 11 or 12 has been proved and its master has been "'
convicted. Section 13 is thus mandatory and it is not open to the cou~
F as soon as the masters of the vessel is convicted of an offence und:~ - \ 1

Section 12 and is awarded penalty to refrain from making an order ,
confiscating the offending vessel.
For the reasons aforesaid we dismiss all these appeals and affirm
the judgments and orders of the High Court. The vessels have been
detained in Bombay Port after apprehending them on July 26, 1984
G and a huge amount has to be paid as port charges. Considering the
facts and circumstances of the case the Port Authorities at Bombay
may consider if an application is made by the parties for exemption or
partial exemption of the same favourably in view of the order of con-
fiscation of the trawlers. There will be no order for costs.
H
S.L. Appeals dismissed.