Judgment :- This is a petition under Article 226 of the Constitution for the issue of a writ of certiorari to quash the order of the Collector of Customs, Madras, directing confiscation of gold, weighing 305.56 tolas, of the value of Rs. 27, 500.40, belonging to the petitioner, under section 167(8) of the Sea Customs Act read with section 23-A of the Foreign Exchange Regulation Act, 1947. 2.The events that led to the order of confiscation are, briefly, as follows. The petitioner is a bullion dealer at Bangalore, trading in the name of 'Jain Jewellers'. His employee, Ghevarchand, alighted at the Madras Central Station from the Express Train from Bangalore on 8th October, 1957, at about 4-30 p.m. He was intercepted by the police officers at the station, and, on search of his person, it was found that he was carrying a substantial quantity of gold in a piece of cloth tied round his waist. The police officers detained the gold under a 'mahazar' and informed the Customs Department. On interrogation by the Customs Officers, Ghevarchand produced a manuscript letter written in the letter-head paper of 'Jain Jewellers', Bangalore, dated 8th October, 1957, and addressed to M/s. Amichand Nagindas, Jewellers, Madras. The letter was in the following terms : "We have to-day sent along with Mr. Ghevarchand two pieces of gold, weight 305.56 approximately, which kindly take delivery and pay him the agreed price. Solicit the further order. Thanking you, ......' on 9th October, 1957, Amichand Nagindas was contacted by an Inspector of Customs, and Chunilal, the managing partner of that firm, gave a written statement, wherein he stated as follows : 'I state I have not placed any order with M/s. Jain Jewellery; the gold in question cannot be either for me or to my firm. I have no communication from that party, namely, Jain Jewellers, Bangalore." * 3.The petitioner himself arrived in Madras on 9th October, 1957, and gave a statement to the Customs Authorities. He stated that the gold was despatched from Bangalore in pursuance of an oral contract between him and M/s. Amichand Nagindas entered into through the medium of the trunk phone, that the gold was purchased by him in India, Bombay and Bangalore, that the purchase was supported by bills and by his own account-books and that he would produce them on 15th October, l957. Apparently, the bills and the account-books were produced before the authorities, nevertheless, a show cause notice was issued on 19th October, 1957, asking the petitioner to show cause why the gold should not be confiscated under the provisions of the Sea Customs Act and the Foreign Exchange Regulation Act. The petitioner submitted a written explanation, dated 25th October, 1957, alleging that the gold was purchased by him from well-established and reputed merchants, as per bills already produced by him before the authorities. On 17th November, 1957, the Collector of Customs took the view that the gold seized was smuggled gold, and that under section 178-A of the Sea Customs Act, the onus of proving that it was not contraband was upon the petitioner. The petitioner presented a number of applications to the authorities for the release of the gold. There was a regular enquiry by the Collector, in which the petitioner was represented by counsel. The petitioner wanted a copy of the statement given by Chunilal of M/s. Amichand Nagindas and Co., and a copy was given. It must be mentioned that the authorities obtained a second statement from Chunilal on 21st December, 1957. In this statement, he affirmed the statement already given by him on 9th October, 1957, and submitted that it was impossible for a Madras bullion merchant to purchase gold from Bangalore, as Madras merchants as well as Bangalore merchants purchased only from Bombay merchants and as the Bangalore merchants could not sell at a price which would be economical for a Madras dealer to purchase with a view to trade. He denied that he had placed any order with M/s. Jain Jewellers at Bangalore and he denied having put through any trunk call with the petitioner at any time prior to 8th October, 1957. The Assistant Collector of Customs recorded the information given to him by Chunilal and got his signature. The vital portion ot that record may now be extracted.'He (Chunilal) explained that transaction with Bangalore party in respect of new gold is impossible, as the source from which the Bangalore parties get their gold, viz., Bombay, is the same from which the Madras parties acquire the gold. The vital portion ot that record may now be extracted.'He (Chunilal) explained that transaction with Bangalore party in respect of new gold is impossible, as the source from which the Bangalore parties get their gold, viz., Bombay, is the same from which the Madras parties acquire the gold. Transport charges being the same for both places, the Bangalore parties are not in a position to sell the same gold at a profit to Madras parties; unless there is old stock and there is considerable upward fluctuation in prices. He solemnly denies any connection with the gold under detention by the Custom House ............ or having entered into any discussions over trunk telephone with M/s. Jain Jewellers of Bangalore in respect of sale or purchase of gold.' 4.As a result of the enquiry, the Collector found that the actual quantity of gold seized on 8th October, 1957, from Ghevarchand was of the weight of 305.56 tolas consisting of four pieces of gold; one block weighing 205.34 tolas, another block of 97.69 tolas and two small pieces weighing 2.53 tolas. The books of account with the petitioner examined by the Customs Authorities disclosed his stock position of gold as follows: (1) balance of stock of gold acquired from Bombay merchants-80 tolas approximately and (2) purchases from M/s. Hindustan Jewellery Mart- 235 tolas approximately. The case of the petitioner at the enquiry was that M/s. Amichand Nagindas placed orders of 300 tolas of gold at Rs. 104.50 per tola, that he agreed to fulfil that order and that he actually purchased a quantity of 235 tolas from M/s. Hindustan Jewellery Mart on 7th October, 1957, at Rs. 104.25 per tola. The rate at which the petitioner purchased from Hindustan Jewellery Mart would not be Rs. 104.25 per tola if the sales-tax paid by him were to be taken into account. Inclusive of the sales-tax paid, the rate would work out at Rs. 104.51 per tola. The selling rate of Rs. 104.50 to M/s. Amichand Nagindas was inclusive of sales-tax. The particulars of petitioners' purchase of gold, as revealed at the enquiry, are as follows : The contention urged on behalf of the petitioner was that it was out of this stock of gold which he held, that he despatched 305.56 tolas through Ghevarchand to Madras in compliance with the oral order of M/s. Amichand Nagindas placed to him on the phone. The Collector of Customs disbelieved the petitioner's case, and, applying the statutory presumption available under section 178-A of the Sea Customs Act, held that the gold seized was contraband. The Collector recorded his findings in these terms : 'The only explanation which appears to fit all the known facts and all the additional factors which have been taken into consideration at the request of M/s. Jain Jewellers, is that M/s. Jain Jewellers offered gold to M/s. Amichand Nagindas on October 6th and 7th 1957, that a bargain was struck at a low rate, because both parties knew perfectly well that the gold to be delivered was smuggled gold and that the records purporting to show that M/s. Jain Jewellers had acquired roughly 315 tolas of gold shortly before October, 7th, 1957, are either fictitious or relate to purchases of entirely different gold ... it leads inexorably to the conclusion that the movement which led to the gold being discovered at the Madras Central Station on 8th October, 1957, was a movement carried out in such an unusual manner as to raise a very strong presumption indeed that the gold must be smuggled gold.' It is the above order which is challenged in this writ petition. 5.Mr. V.C. Gopalaratnam, learned counsel for the petitioner submits that the Collector was wrong in invoking section 178-A of the Sea Customs Act, as it cannot be said that there was any reasonable belief that the gold was smuggled gold at the time of the seizure. Section 178-A reads : "Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be on the person from whose possession the goods were seized." * The existence of reasonable belief is an essential conditions for the section to operate, and, surely, 'reasonable belief' indicates a state of mind possessed of facts on which the belief is founded, and not a chimerical mind filled with suspicion. 6.When was the gold seized in this case, is the question. On 8th October, 1957, Ghevarchand was deprived of the custody of the gold. The police officers took it in the first instance and handed it over to the Customs Department. 6.When was the gold seized in this case, is the question. On 8th October, 1957, Ghevarchand was deprived of the custody of the gold. The police officers took it in the first instance and handed it over to the Customs Department. The Customs Inspector contacted M/s. Amichand Nagindas on 9th October, 1957, and got a statement from one of its partners. The petitioner himself gave a written statement on that date. Therein, he stated that he would produce the purchase-bills and account-books on 15th October, 1957. A show-cause notice was issued by the Collector on 19th October, 1957. The basis of "reasonable belief" that the gold was contraband is set out thus by the Collector in the show-cause notice : "Having regard to the statement made by Shri Chunilal, partner of M/s. Amichand Nagindas of Madras, and to the prices referred to by M/s. Jain Jewellers in the matter of purchase and sale of the gold under detention, as explained above, there is reasonable belief to hold that the gold under detention has not been acquired from the sources referred to, and there is reasonable belief to hold that this gold has been imported in contravention of section 19 of the Sea Customs Act read with section 8(1), Foreign Exchange Regulation Act, and, as such, is liable to confiscation. The gold has therefore been seized under section 178 of the Sea Customs Act." * 7.A mere assertion of reasonable belief that the goods were smuggled goods at the time of seizure is no answer to a challenge of that belief. That has to be established by the seizing authority, furnishing the materials on which the belief was reasonably founded. I cannot say that the circumstances relied on-the repudiation of the transactions by Amichand Nagindas and the uncommercial conduct of the petitioner- would not have induced the belief of contraband nature of the large-quantity of gold seized. 8.Learned counsel relies on a recent decision of the Supreme Court reported inGian Chandv.State of Punjab, and argues that detention of the gold by the police and handing it over to the Customs Officials cannot amount to a seizure as contemplated by section 178-A of the Act. 8.Learned counsel relies on a recent decision of the Supreme Court reported inGian Chandv.State of Punjab, and argues that detention of the gold by the police and handing it over to the Customs Officials cannot amount to a seizure as contemplated by section 178-A of the Act. In that case, gold was seized by the police under the provisions of the Criminal Procedure Code, and the person, from whose custody the seizure was effected, was prosecuted under Sections 411 and 414, I.P.C. But the prosecution was not proceeded with, presumably because no proof was available that the gold was stolen article. The gold was handed over by the Magistrate to the Customs authorities under section 180 of the Sea Customs Act. The relevant portion of section 180 reads: 'In every such case, the police officer seizing the things shall send written notice of their seizure and detention to the nearest Custom House; and immediately after the dismissal of the complaint or the conclusion of the enquiry or trial, he shall cause such things to be conveyed to, and deposited at, the nearest Custom House, to be there proceeded against according to law.' The gold was confiscated by the Customs Authorities under section 167(8) of the Sea Customs Act, and, in addition, a prosecution was launched against the owner of gold under section 167(81) of the Sea Customs Act. The question that arose for consideration was whether the presumption under section 178-A of the Sea Customs Act was available for the prosecution to sustain a conviction of the person charged with the offence. The Supreme Court held that the presumption was not available, because the essential prerequisite of the applicability of section 178-A was that there should be a seizure under the Sea Customs Act. Rajagopala Ayyangar, J., delivering the judgment, observed that the handing over of the gold to the Customs Authorities under section 180 of the Sea Customs Act was not a seizure under that Act. Rajagopala Ayyangar, J., delivering the judgment, observed that the handing over of the gold to the Customs Authorities under section 180 of the Sea Customs Act was not a seizure under that Act. At page 156, the following observation occurs : "The question that now arises is whether the possession obtained by the Customs Department by goods being conveyed to and deposited at the nearest Custom House within the last words of the second paragraph of S. 180 are goods which have been seized under the Act within the opening words of S. 178-A. In the first place, it would be seen that these three sections which have to be read together, draw a distinction between seizure under the Act and a seizure under provisions of other laws. A seizure under the Act is one for which the authority to seize is conferred by the Act and in the context it could be referred to as a seizure under section 178." * The Supreme Court further held that the seizure was complete, the moment the owner was deprived of possession of the gold at the instance of the police, and then, the handing over of the gold by the police to the Customs Department did not amount to a fresh seizure under the Customs Act. 9.'Detention' and 'Seizure' are two different legal concepts. Every detention is not seizure; but seizure always includes detention. The person detaining holds possession not in negation or denial of the rights of the owner; but a seizure involves forfeiture of such rights. It cannot be said that there was a seizure at the time when Ghevarchand was compelled to part with gold at the Central Station under the compelling directions of the police officials. At that stage, it was only detention, and the seizure was an event which occured very much later, when the Customs authorities, after due investigation, determined to seize the gold and issued a show-cause notice why there should not be confiscation under the Sea Customs Act. This case is practically covered by the decision of the Supreme Court inCollector of Customs, Madrasv.Nathella Sampathu Chetty, where the facts and circumstances were almost identical with those of the present case. This case is practically covered by the decision of the Supreme Court inCollector of Customs, Madrasv.Nathella Sampathu Chetty, where the facts and circumstances were almost identical with those of the present case. The decision of the Supreme Court referred to above cannot help the petitioner to advance his contention that there was a seizure when the police officers took custody of the goods, and that, at that point of time, there could not have been any reasonable belief on the part of the Customs authorities, so as to invoke the applicability of section 178-A of the Act. I have no hesitation in rejecting the petitioner's contention in this behalf, and, in my opinion, section 178-A was properly called into play by the Collector. 10.It is next contended on behalf of the petitioner that the statements of Chunilal of M/s. Amichand Nagindas recorded behind his back have been relied on by the Collector as evidence against him and the order is therefore vitiated by breach of natural justice. That the petitioner was aware of the stand taken by Amichand Nagindas cannot be, and is not, disputed. In the show-cause notice itself, the authorities referred to the statement of Chunilal to the effect that he did not place any order with M/s. Jain Jewellers at Bangalore. Further, the petitioner applied for a copy of the statement of Chunilal given in December, 1957, and a copy was furnished to him. The importance which the Department attached to the statement of Chunilal was not kept in secret, and, indeed, the petitioner took care to say on every occasion that Chunilal's conduct was not above board, though it was explicable as the conduct of self-preservation. The petitioner did say repeatedly with a good deal of force and logic that he should not be treated as a suspect, merely because it is convenient to Chunilal to deny the attempted transaction which broke down by the unexpected interference of the Customs Authorities. It cannot therefore be said that the reception of Chunilal's statements as evidence against the petitioner was in violation of rules of natural justice. Chunilal was not made available for cross-examination on his statements but I cannot say that this is a sufficient circumstance in contravention of natural justice. It does not appear that the petitioner desired to have an opportunity to cross-examine Chunilal, but was denied that opportunity. Chunilal was not made available for cross-examination on his statements but I cannot say that this is a sufficient circumstance in contravention of natural justice. It does not appear that the petitioner desired to have an opportunity to cross-examine Chunilal, but was denied that opportunity. I do not find any procedural irregularity resulting in miscarriage of justice to justify the issuance of a writ. 11.Mr. Gopalaratnam contends that the impugned order is plainly unreasonable, as all the materials placed before the Collector for establishing that the gold was obtained in the open market at Bangalore and Bombay have been rejected without due consideration, allowing suspicion to prevail over rational thinking. The two circumstances relied on by the Collector for holding against the petitioner are: (1) the denial by Amichand Nagindas of their having placed any order with the petitioner or purchase of gold, and (2) the improbability of the petitioner selling gold in Madras market at a pecuniary loss. Mr. Gopalaratnam does not contend that these are extreneous considerations which ought not to have been taken into account by the Collector. His argument is that, in the predicament in which Amichand Nagindas found themselves, they would not have courted trouble by admitting the transaction with the petitioner, and that their behaviour cannot indicate that the petitioner's version is false. With regard to the loss which the petitioner admittedly incurred in undertaking to supply the gold to Amichand Nagindas, the submission of the petitioner is that business is not always a gain and a businessman suffering a small loss cannot be said to be conducting himself so irrationally as to lead to the inference that the transaction itself is untrue. The argument is, no doubt, impressive; but the question still remains whether the petitioner can get relief in a proceeding under Article 226 of the constitution. I have to move with the fetters of writ jurisdiction, and I must necessarily look for an error of law apparent on the face of the record or an excess of jurisdiction or to see if the conclusion of the subordinate tribunal is no perverse and unreasonable that nobody with any spark of reasonableness would have ever reached it. It is true that this Court is not powerless to quash decisions emanating from a mind foreclosed to reason. A stubborn unbelieving frame of mind is certainly not cast in a judicial mould. It is true that this Court is not powerless to quash decisions emanating from a mind foreclosed to reason. A stubborn unbelieving frame of mind is certainly not cast in a judicial mould. 12.I have now to consider the question whether there are grounds for a certiorari in this case. The following facts emerge on a close analysis of the materials on record. The petitioner was a partner of the firm called Hindustan Jewellery Mart from 29th December, 1949. He left the firm and started his own business, Jain Jewellers - on 2nd July, 1957. This business consisted of dealing in bullion. His capital for the new business is stated to be Rs. 20, 000/- borrowed from one Fulchand Pratapjee at 7.5% interest. He purchased gold in September, 1957, from Chandulal Kushaldas, Bombay and Hindustan Jewellery Mart, Bangalore, at prices ranging between Rs. 106/- and Rs. 107/- per tola. He had no dealing with Amichand Nagindas prior to the transaction said to have been put through on trunk phone on 6th October, 1957. As the time when he received the order on 6th October, 1957, he had certainly not enough gold in his hands to effect the supply. On 7th October 1957, he purchased gold weighing about 235 tolas from Hindustan Jewellery Mart, Bangalore, at Rs. 104.51 (inclusive of Sales Tax), while the rate at which he agreed to supply the Madras merchant was Rs. 104.50. He received orders for supply of 300 tolas, but he actually supplied 305.56 tolas. He knew that he had to despatch the gold through a special messenger incurring considerable expenses by way of railway fare and other travelling expenses. The market rate at Bangalore is generally higher than at Bombay. The petitioner himself admitted this position in his statement dated 9th October, 1957. The actual deal is therefore a definite loss to the petitioner. He sends a special messenger incurring expenses of Rs. 80/- to deliver the gold at Madras. He expected a trunk call from Ghevarchand immediately after delivery of gold. He did not receive any information till 8 p.m. on 8th October, 1957 and he therefore left Bangalore the same night by the Mail train and arrived in Madras on 9th October, 1957. This shows how anxious the petitioner was about the safe delivery of the gold. He expected a trunk call from Ghevarchand immediately after delivery of gold. He did not receive any information till 8 p.m. on 8th October, 1957 and he therefore left Bangalore the same night by the Mail train and arrived in Madras on 9th October, 1957. This shows how anxious the petitioner was about the safe delivery of the gold. He contacted Amichand Nagindas on 9th October, 1957, but was told that they had not received the gold. Then followed the other events already narrated.13.If, on these facts, the Collector found that the seized gold was not proved to have been acquired by the petitioner through the normal trade channel, can it be said that his finding is plainly unreasonable? My answer is No! The business of the petitioner is run on borrowed capital, and it is indeed strange that he should have ventured to incur a loss. No Bangalore businessman of ordinary prudence and normal commercial instincts would have agreed to sell to Amichand Nagindas on 6th October, 1957, at Rs. 104.50 without ready stock on hand, hoping to acquire a stock at a price-level definitely higher than the agreed rate. The information regarding the prevailing market rate at or about the time is furnished by the petitioner himself. The petitioner received a letter from the Jewellers Association dated 25th December, 1957, in these terms : 'In reply to your letter dated 24th December, 1957, we wish to inform you that the radio rates on the following dates were as follows : This price is with reference to gold of 100 touch. For every touch lower than 100, the price would be correspondingly reduced. The letter states : 'If the rate of 100 touch gold is 106.25, the 99 touch gold will be 105.19 i.e. less by Rs. 1.06.' It is true that gold despatched by the petitioner through Ghevarchand was only 99 touch. But, still, it is obvious that the market rate of gold on 6th October, 1957, was much higher than Rs. 104.50 per tola, for which he is supposed to have agreed to supply Amichand Nagindas. The explanation of the petitioner for this queer conduct can best be set out in his own words, as contained in his answer to the show-cause notice : 'On the date of the said transcation, the price of acid gold at Bangalore, was Rs. 104.50 per tola, for which he is supposed to have agreed to supply Amichand Nagindas. The explanation of the petitioner for this queer conduct can best be set out in his own words, as contained in his answer to the show-cause notice : 'On the date of the said transcation, the price of acid gold at Bangalore, was Rs. 104/- and therefore we made a bargain with M/s. Amichand Nagindas for sale at Rs. 104-8-0 per tola. However, as we could not obtain the entire quantity from the market, we had to give delivery from our old stock purchased at higher price to the extent of about 70 tolas only. In a fluctuating market, the merchants of specially reputed firms would not mind the loss or profit and would stick up to their business obligations.Accordingly, in order to maintain our high reputation and integrity, we wanted to supply the goods as per contract, although it entailed the loss. Such a feature is not uncommon in bullion dealing as is well known to you.' 14.The question of fulfilling the obligation under a contract is one that arises after the contract. The more important questions are: (1) was there such a contract? (2) If there was one, was the subject matter smuggled gold (which he must have acquired for a low price) or gold acquired from open market? It seems to me that the contract itself, is doubtful, and, even if there was a contract, it must have related only to contraband gold. It follows that this seized gold was really contraband. This is the view taken by the Collector, and, in my opinion, it is correct. 15.The petitioner has failed to make out a case for the issue of a writ. The writ petition fails and is dismissed with costs. The rule nisi is discharged. W.P. No. 517/58. The petitioner in W.P. 516/58, has filed this petition, seeking the alternative remedy by way of Mandamus. There are no grounds for a mandamus. This petition is also dismissed, but without costs.