State of Maharashtra vs. Mayer Hans George (1965) SCR  123

Introduction:-
A very important decision was given by the Supreme Court of India in 1965 in a case named State of Maharashtra vs. M. H. George[1] which explains the criminal liability under Indian law. This case is very important for the analysis of Article 21 of the Indian Constitution as well as examining the principles of mens rea (guilty mind)[2] which are particularly important for statutory offenses.
Officials at the Santa Cruz Airport in Mumbai, India, arrested a businessman named George who was carrying a large amount of gold in violation of The Foreign Exchange Regulation Act, 1947 (FERA). The legal issue is whether George can be held criminally liable, given the mens rea requirement under FERA. On the other hand, his defense argues that he did not intend to commit a crime and was not aware of the law and did not intend to violate it.

Background:-

The case of State of Maharashtra vs. M. H. George arose on the basis of economic challenges that arose after India’s independence. Issues like illegal gold smuggling and balance of payments were a matter of concern in India. To eliminate all such concerns, the Government of India introduced the Foreign Exchange Regulation Act in 1947[3], which aimed to curb illegal gold export and also regulate foreign exchange transactions.
FERA was designed to secure India’s foreign exchange reserves and to stabilize the foreign exchange rate. The Government of India gave the Act wide powers to control the import and export of gold into and out of the country through FERA and to monitor and regulate foreign exchange transactions.

Fact of This Case:-
George, an Indian-American citizen, was accused of smuggling gold into India. On 27 September 1963, George was flying from Zurich to Manila via Bombay on a Swissair flight. When George arrived at Santa Cruz Airport in Mumbai, the customs officials at the airport checked him and found that George was carrying 34 kilograms of gold hidden in his bags, which was not known to the customs officials, which was in violation of the Sea Custom  Act, 1878 and the Foreign Exchange Regulation Act 1947.
When George was going from Zurich to Manila, the flight had a scheduled stopover in Mumbai. During this time George had to go through a customs check at the airport. When the customs officials were checking George’s suitcase, they found a specially designed box hidden inside the suitcase which contained gold. This was in violation of Section 8(1) of the FERA, 1947. Under this act, bringing gold from another country into India is prohibited without special or general permission of the RBI. George was immediately detained by the airport authorities and charged for violating Section 167(8) of the Sea Custom Act and Section 8 of FERA.

Issues Raised:-
1:- Whether it is necessary to prove mens rea to prove the offenses under section 23(1-A) and section 8A of the Foreign Exchange Regulation Act, 1947?
2:-Is it necessary to obtain necessary permission from RBI for bringing gold from another country into India irrespective of the person’s intention and knowledge?
3:- FERA was introduced with the objective of improving the country’s economy. How did it affect the mens rea under this objective?
4:-The legislative intent behind the FERA Act is to determine whether strict liability is imposed on the violators of the FERA?
5:-Was George given enough fairness during the trial and investigation?
6:-Whether the offenses constituting strict liability under FERA are constitutional under Article 21 of the Indian Constitution?

Arguments of the Parties:-

Appellant:-
1:-The appellant argued that while seizing and searching George at the airport, the customs officials had scrupulously followed the provisions of the Customs Act, 1962 and further submitted that even minor procedural lapses would not invalidate the evidence found sufficiently against the accused and if it is not prejudicial to the defense of the accused, the court in the case of Collector of Customs v. Sampathu Chetty (1962)[4], Court had held that procedural defects do not vitiate the action if they do not give rise to failure of the court to do so.
2:-The state claimed that the Act was brought to prevent smuggling into India and to protect economic interests and argued that citing State of Punjab vs. Balbir Singh 1994[5], the court had said that the purpose of the law should be interpreted in such a way that it furthers its purpose and also helps in curbing incidents of economic crime.
3:-The appellant insisted that the goods which were seized by the customs officers including the testimony of the accused are credible and sufficient to prove the offense committed by George. The appellant further contended that the High Court erred in rejecting the evidence on the ground of minor discrepancies as it was held in Hiralal v. State of Madhya Pradesh 1973[6], that evidence should not be discarded on the ground of minor discrepancies.
4:-The appellant further argued on the basis of compliance principles that the law was followed by the customs officials during the investigation and added that the principles were upheld in several decisions such as stated by the Court in the case of State of Punjab v. Balbir Singh 1994.
5:-The appellant cited the case of State of Gujarat vs. Mahanlal Jitamalji Porwal 1987[7] to emphasize the importance of preventing economic crimes where the Court had emphasized the need for stringent measures to deal with the crimes.

Respondent:-
1:-The respondent argued that when George was being examined by the customs officers, the customs officers had failed to follow the Customs Act and thus George’s rights were violated. The defense cited A.K. Gopalan v State of Madras 1950[8], which laid importance on protecting individual rights against arbitrary state action.
2:-The respondent further submitted that the language of the Act must be strictly construed, particularly in a case where the liberty of an individual is at stake. The respondent further cited Tolaram Relumal v. State of Bombay 1954[9], where the Supreme Court had held that the punitive law must always be interpreted keeping in view.

3:-The respondent argued that the evidence adduced by the appellant was not sufficient to prove George guilty. It further pointed out contradictions and inconsistencies in the timing of the seizure by the customs officials of George’s goods and cited the case of Kali Ram vs. Himachal Pradesh 1973[10], to submit that the prosecution would have to prove the facts on a proper basis to prove the case.
4:-The respondent argued that the procedure followed by the customs authorities violates the right to fair investigation. The defense cited Maneka Gandhi vs. Union of India 1978[11], and said that the Supreme Court had extended due process and natural justice to it.
5:-The respondent further cited the case of Mohinder Singh v. State of Punjab 1987[12], wherein the Supreme Court had emphasized the need for enforcement of procedural rules to ensure a fair trial.


Judgment:-

Judgment of the Bombay High Court:-

The trial in this case started in Bombay High Court in which George challenged his arrest on several grounds of prosecution and the main ground on which George was being tried was that he was being tried under some of the provisions of FERA and the main provisions of FERA were not fully published due to which other foreign nationals like him outside India were not informed and further that he had no knowledge about these laws and hence cannot be held liable for violating these laws.
The Bombay High Court rejected the argument put forward by George and said that lack of knowledge of the law is not a valid defense, especially in cases related to the economy and economic crimes which have a profound impact on national security. The High Court stressed on the full implementation of laws like FERA to prevent illegal activities and cases like smuggling.
Justice Chagla, while giving the judgment, said that the law was properly applicable at the time when George committed the crime and the court also rejected the argument in which George said that the law was not fully published. The High Court further said that there is no need to inform every person to implement the law in the country.

This decision of Mumbai High Court was a big blow to George, after which George decided to appeal against the decision of the High Court in the Supreme Court.

Judgment of the Supreme Court of India:-

Judges:- Justice J. R. Mudholkar, Justice K. Subba Rao, and Justice N. Rajagopala Ayyangar.

George’s case was heard by a three-judge bench of the Supreme Court. George’s arguments in the Bombay High Court were similar to those in the Supreme Court. He argued that he had no knowledge of the provisions of his FERA and hence no action could be taken against him for violating those laws.
In this landmark judgment, the Supreme Court upheld the decision of the Bombay High Court and rejected the arguments put forward by George. Justice J. R. Mudholkar while delivering the majority verdict stressed that ignorance of the law is not a sufficient excuse. The court said that George cannot be exempted from the operation of Indian law even though he is a foreign national.
The Supreme Court also considered the issue of publication of the FERA law and further stated that the law was implemented properly. The court said on FERA that it was brought to prevent incidents like smuggling in India through this law and for the purpose of protecting the foreign exchange reserves. While giving the verdict, the Supreme Court said that FERA is a special type of law to prevent serious crimes, so it is necessary to implement it completely to fulfill its purpose. The court concluded that George should be prosecuted in a proper legal manner, and he cannot be freed on the ground that he had no knowledge about the law.

Conclusion:-
The decision of the case of M.H. George vs. State of Maharashtra remains in Indian legal history. The decision of this case addressed the principles of non-application of foreign laws in India and lack of knowledge of the law. This decision given by the Bombay High Court and the Supreme Court has set a precedent for future related cases. This case marks the line for the judiciary to uphold the rule of law forever and to ensure that a person, irrespective of his country of origin, will have to answer for his actions under Indian law. This decision of the Supreme Court especially emphasized strict changes to protect national interests.

Reference:-

• https://indiankanoon.org

• https://blog.ipleaders.in

• https://lawplanet.in

• https://lexpeeps.in

• https://uacademy.com

• https://en.wikipedia.org