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2016 (6) TMI 309 - PUNJAB & HARYANA HIGH COURT

2016 (6) TMI 309 - PUNJAB & HARYANA HIGH COURT - TMI - Imports of Heavy Melting Scrap made by mis-declaring the relevant particulars to evade duty and prohibition - Constitutionality of vires of 2(y)(ii) of PMLA as amended vide section 145(ii) of the Finance Act, 2015 enhancing the monetary threshold for the offences specified under Part B of the Schedule from the total value involved in such offences from “Rs. 30 lakhs or more” to “Rs. One crore or more” - Two limitations in grant of bail impos .....

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ined in Section 45(1) of PMLA extends to all the offences mentioned in such amended Part A is neither logical nor intended by the legislation. The offences which were in the earlier Part A of the Schedule (prior to 2013 Amendment) are evidently henious offences such as waging war against the country, offences under NDPS Act and Terrorist activities etc. Other scheduled offences, which prior to 2013 amendment were under Part B of the Schedule, cannot be equated with such heinous offences in the c .....

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ent) Bill, 2011 to apply such stringent limitations in grant of bail to person accused of Scheduled offences earlier falling under Part B of the Schedule, but now existing in Part A thereof. On the contrary, the only object sought to be achieved by the said 2013 amendment in Schedule was to overcome this monetary threshold limit of ₹ 30 lakhs so that for invocation of PMLA in respect of the laundering of proceeds of crime involved in offences earlier falling under Part B of the Schedule, t .....

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nt) Bill, 2011 which led to 2013 amendment in Schedule, we are unable to agree with the petitioner that by necessary corollary of the aforesaid 2013 amendment, the stringent limitations in grant of bail were now made applicable to all scheduled offences which are punishable for more than three years and were put together in the new Part-A. Therefore, the reference to the offences under Part A of the Schedule in the context of Section 45 (1) requires to read down to apply only to those scheduled .....

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hs for invocation of PMLA in respect of the laundering of proceeds of crime involved in those offences. No substantive amendment was proposed with express intention to apply limitations on grant of bail as contained in Section 45(1) in respect of persons accused of such offences which were earlier listed in Part B. Therefore, twin limitations in grant of bail contained in Section 45(1) as it stands today, are not applicable qua a person accused of such offences which were earlier listed in Part .....

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ering (Amendment) Bill, 2011 and the above discussion and findings, have no hesitation in holding that the reference to the offences under Part A of the Schedule in the context of Section 45(1) has to be necessarily read down to apply only to those persons who are arrested under Section 19 of PMLA on accusation of money laundering, who are accused of commission of scheduled offences which were listed under the Part A of the Schedule existing prior to 2013 amendment. In other words, the limitatio .....

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mission of such Scheduled Offences which were earlier listed under Part A of the Schedule. However, only the normal principles governing bail under Section 438 or 439 of the Code would apply in relation to a person arrested under PMLA on accusation of commission of such scheduled offences, which were earlier listed under Part B of the Schedule. - Seeking direction for investigation of offence under Section 3 r/w 4 of PMA along with the offence under Customs Act - Held that:- after perusing b .....

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of PMLA or Customs Act, 1962 which is in conflict with the provisions of the Code, such provision of PMLA or Customs Act, 1962 would have overriding effect on the conflicting provision of the Code. If there is no such overriding provision in these special statutes, the provisions contained in the Code would surely apply in view of section 4(2) read with section 5 of the Code. - By application of Section 4(2) of the Code and in view of the aforesaid binding precedents, the words 'police offic .....

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m jurisdictional Magistrate permission to investigate and a warrant of arrest under Section 104(1) of the Act. - In the Customs Act, 1962 the 'Chapter XIII-Searches, Seizure and Arrest', from Section 100 to 110A, uses the words “Customs officer” or “proper officer” or “adjudicating authority”. Therefore, no police officer can commence investigation, carry search, investigate, arrest , or grant provisional release of seized goods under the Customs Act, 1962, unless authorized under the Act in .....

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ms Act, 1962 by any officer authorised under the said Act is concerned, there is no bar and the Magistrate may direct such investigations under Section 155(2) or 156(3) depending upon whether the alleged offence under Customs Act, 1962 in the complaint is 'cognizable' or 'non-cognizable'. However, the Magistrate cannot take cognizance of the offence unless the conditions specified in the overriding provisions of Section 137(1) or 137(2) are satisfied. Once such directions are issued by the Court .....

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n 3. As per the said Section 3, the offence of money laundering necessarily requires “knowingly projecting or claiming” any “proceeds of crime” as untainted property. The property covered under the term “proceeds of crime” is defined in section 2(u) of PMLA, and the accused person shall necessarily derive or obtain such property, directly or indirectly as a result of criminal activity relating to such offence which is specified in the Schedule to PMLA. Therefore, any property derived or obtained .....

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tion 17 or 18 of PMLA, the first proviso to sub-Section (1) of Section 17 and also of Section 18, create an embargo and bars such search unless in relation to the 'Scheduled Offence, either a report under Section 157 of the Code is forwarded to a Magistrate, or a complaint has been filed for taking cognizance by an officer authorised to investigate Scheduled Offence or other conditions specified are fulfilled. - Therefore, so far as PMLA is concerned there is a bar on taking cognizance of an .....

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unless the Scheduled Offence is registered under Section 154 and a report thereof is sent under Section 157 of the Code to the Magistrate, or, a complaint is filed for taking cognizance of a Scheduled Offence by an officer authorised to investigate Scheduled Offence. Further, cognizance of offence under PMLA can be taken only by a Special Court notified and designated under Section 43 for the specified area, and trial shall be in accordance with Section 44 read with Section 46 of PMLA. Section 4 .....

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ognizance of any offence punishable under Section 4 except upon a complaint in writing made by the officer specified therein. - As of now for the alleged Scheduled Offence under the Customs Act, 1962 neither any case is registered under Section 154 by the Customs Authorities for investigating any cognizable offence under the said Act, nor is there any report in respect of the same forwarded under Section 157 of the Code. There is no complaint for taking cognizance filed in Court by any offic .....

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ffence, the petitioner cannot seek from the jurisdictional Magistrate any directions under the Code for investigations by the authority under PMLA. Therefore, the composite prayer seeking direction for investigation of offence under Section 3 r/w 4 of PMA along with the offence under Customs Act, 1962, would not be maintainable. - Seeking issuance of certificate under Article 134-A of the Constitution of India - Held that:- we have not come across any precedent where the following two issues .....

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v Sharma, Advocate, Mr. Sunish Budhish, Advocate ORDER M. Jeyapaul, J. 1. The petitioner is an Advocate and it is his claim that he is desirous of instituting Criminal case alleging duty evasion in import of Heavy Melting Scrap classifiable under Customs Tariff Heading 7204 4900 at ICD Ludhiana and laundering by the offender of the proceeds of crime so generated. According to him the imports are being made by mis-declaring the relevant particulars to evade duty and prohibition. He also apprehend .....

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roceeds of crime relating to this Scheduled Offence would attract offence under Section 3 of PMLA, which would be punishable under Section 4 thereof. 2. The instant petition challenges the vires of firstly Section 2(y)(ii) of PMLA as amended vide section 145( (ii) of the Finance Act, 2015 enhancing the monetary threshold for the offences specified under Part B of the Schedule from the total value involved in such offences from Rs. 30 lakhs or more to Rs. One crore or more , and secondly the inse .....

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ail in criminal cases under PMLA. He submits that ends of justice would be met, if these impugned provisions are interpreted and read down in such manner so that the stringent provisions under Section 45(1) of PMLA imposing limitations for grant of bail shall necessarily apply in the matters of money laundering in respect of the said Scheduled offence under Section 132 of Customs Act, 1962, which has been erroneously placed under Part B of the Schedule to PMLA. To suggest that the legislative in .....

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The petitioner has annexed a copy of the Prevention of Money-Laundering (Amendment) Bill, 2011, which vide clause 33 proposed amendment in the Schedule to PMLA. For the then existing Part A, a new Part A was proposed to be substituted, while omitting paragraphs 1 to 25 in the then existing Part B. Consequently, all those offences which were under these paragraphs 1 to 25 of Part B, and all heinous offences which were under the then existing Part A, were proposed to be put together in the new pro .....

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rovisions of bail more stringent in all matters of money laundering irrespective of the magnitude or gravity of the scheduled offence. 4. The petitioner has argued that he intends to apply before the Jurisdictional Magistrate for issuance of directions to the Respondent no. 2 and 3 for commencing investigations into these criminal offences and prosecuting the accused for commission of these offences. However, according to him he would not be permitted to set the criminal law into motion by appro .....

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T 8 (P&H). As per the said judgment notwithstanding Section 155 of the Code, in exercise of powers under Section 13 of Central Excise Act, 1944, a Central Excise officer can arrest a person without a warrant, despite the offence being a non-cognizable offence. It was held that a Central Excise Officer cannot be equated with a 'police officer' for the purpose of section 155 of the Code for investigating a non-cognizable offence punishable under Central Excise Act, 1944. He has also pl .....

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rocedure may not have application as per the ratio laid down in Sunil Gupta (supra). He submits that the same view can also be inferred from the judgment of the Hon'ble Supreme Court in Guatam Kundu (supra), wherein it has been held in the light of Section 65 and 71 of PMLA that the provisions of PMLA have overriding effect on the provisions of the Code. He also referred to the non-obstante clause in Section 104(4) of the Customs Act, 1962, which coupled with the view already taken in Sunil .....

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held that all offences under the Customs Act, 1962, besides being noncognizable were also 'bailable'. Thereafter, with effect from 28.05.2012 sub-sections (4) and (5) were inserted by substitution for the earlier sub-section(4), in Section 104 of the Customs Act, 1962. He submitted that as per the consistent view of the Respondents, although several decisions concerning the issue of applicability or otherwise of the provisions of Code were referred in the said judgment, however, the onl .....

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, 1962 for launching prosecution and filing of complaint by appropriate authority under second proviso to section 45(1) of the PMLA, both of which otherwise stipulate a bar on taking of 'cognizance'. He relied upon the judgment of Hon'ble Supreme Court in Narayandas Bhagwandas Madhavdas vs. State of West Bengal, 1999 (110) ELT 85 (SC) to buttress his argument that Courts do not take 'cognizance' while ordering investigations either under Section 156(3) or Section 155(2) of th .....

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from 14.05.2015, for declaring these provisions of PMLA as unconstitutional and ultra vires as the same are contrary to the objects of PMLA warranting stringent conditions for grant of bail vide Section 45(1) in criminal cases under PMLA, and are unconstitutional and/or ii) to issue appropriate writ, order or directions while reading down these provisions for criminal cases, so as to make them constitutional by construing criminal offence under Part B of the Schedule inserted in PMLA w.e.f. 14.5 .....

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Part B of the Schedule inserted in PMLA w.e.f. 14.05.2015, either under Section 156(3) or under Section 155 (2) of the Code of Criminal Procedure, as the case may be, pending grant of sanction requisite for taking 'cognizance' in said Scheduled Offence or under PMLA, iv) issue any other writ, order or directions, which this Hon'ble Court may deem just and fit. 9. The Respondents opposed the reliefs sought in the petition. 10. The submissions advanced by both sides have been carefully .....

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t, 1962 in Part-B of the Schedule in PMLA, vide Section 151 of the said Finance Act, 2015. 12.2. This challenge by the petitioner is mainly on the basis of his contention that the two limitations in grant of bail imposed under Section 45(1) of PMLA are applicable in respect of all offence now falling under Part A of the Schedule to PMLA, after the amendment carried out in 2013 pursuant to proposal contained in Clause 33 of the Prevention of Money-Laundering (Amendment) Bill, 2011 whereby for the .....

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s Rules framed under PMLA. (i) Section 4 of PMLA- 4. Punishment for money-laundering-Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extent to seven years and shall also be liable to fine. Provided that where the proceeds of crime involved in money-laundering relates to any offence specified under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect .....

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n opportunity to oppose the application for such release; and (ii) where the Public Prosecutor opposes the application, the Court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail; Provided that a person, who is under the age of sixteen years or is a woman or is sick or infirm, may be released on bail, if the special Court so directs: Provided further that the Special Court shall not ta .....

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e under this Act unless specifically authorized, by the Central Government by a general or special order, and subject to such conditions as may be prescribed. (2) The limitation on granting of bail specified in sub-section (1) is in addition to the limitations under the Code of Criminal Procedure, 1973 (2 of 1974) or any other law for the time being in force on granting of bail. 12.4 There is no controversy as to whether the offences under PMLA are bailable or not. It is beyond any doubt and is .....

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;s substitution, the following scheduled offences were listed- PART A PARAGRAPH 1 OFFENCES UNDER THE INDIAN PENAL CODE Section Description of offence 121. Waging, or attempting to wage war or abetting waging of war, against the Government of India. 121A Conspiracy to commit offences punishable by Section 121 against the State. 489A Counterfeiting currency notes or bank notes. 489-B Using as genuine, forged or counterfeit currency notes or bank notes. PARAGRAPH 2 OFFENCES UNDER THE NARCOTIC DRUGS .....

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ances. 23. Illegal import into India, export from India or transhipment of narcotic drugs and psychotropic substances. 24. External dealings in narcotic drugs and psychotropic substances in contravention of Section 12 of the Narcotic Drugs and Psychotropic Substances Act, 1985. 25-A Contravention of orders made under Section 9-A of the Narcotic Drugs and Psychotropic Substances Act, 1985. 27-A Financing illicit traffic and harbouring offenders. 29 Abetment and criminal conspiracy. PARAGRAPH 3 OF .....

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ead with Sections 3 and 7 Penalty for dealing with funds of an unlawful association. 13 read with Section 3 Punishment for unlawful activities. 16 read with Section 15 Punishment for terrorist act. 16-A Punishment for making demands of radioactive substances, nuclear devises, etc. 17 Punishment for raising fund for terrorist act. 18 Punishment for conspiracy, etc. 18-A Punishment for organising of terrorist camps. 18-B Punishment for recruiting of any person or persons for terrorist act. 19 Puni .....

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al Code, Prevention of Corruption Act, Customs Act, Copyrights Act, Environment Protection Act, Passport Act, etc were listed, which are much less in gravity and magnitude as compared to the aforesaid Part A offences. These offences under Part B included even those which were compoundable and / or bailable. 12.7 It is thus beyond any doubt that there existed an intelligible differentia in the classification which distinguished the offenders thus grouped together in Part A from those left out of .....

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the provisions of the impugned Act closely it would appear that the legislature classified the offences punishable under section 161, 165 or 165-A of the Indian Penal Code or sub-section (2) of Section 5 of the Prevention of Corruption Act, 1947 in one group or category. They were offences relating to bribery or corruption by public servants and were thus appropriately classified in one group or category. The classification was founded on an intelligible differentia which distinguished the offe .....

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to them as compared with other offenders who did not fall within the same group or category and who continued to be treated under the normal procedure. 12.8. Relevant extract of Section 45 of PMLA which existed prior to the said 2013 amendment ( and continues even thereafter without any change), is as under:- 45.Offences to be cognizable and non-bailable (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence punishable for a te .....

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the age of sixteen years or is a woman or is sick of inform, may be released on bail, if the Special Court so directs: .......... (2) The limitation on granting of bail specified in subsection (1) is in addition to the limitations under the Code of Criminal Procedure 1973 (2 of 1974) or any other law for the time being in force on granting of bail . Thus, Section 45(1) of PMLA, imposed embargo on grant of bail to a person accused of any heinous offence falling under Part A of the Schedule to PM .....

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persons accused of any offence under Part B of the schedule. The legislative intent was that the persons who committed any scheduled offence under Part A would form a class by themselves quite distinct from those offenders who could be dealt with by the normal provisions for bail contained in the Code, and if the offenders falling within this group or category were thus singled out for special treatment by imposing stringent twin conditions contained in section 45(1), there would be no question .....

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ion 2 (t). The proposed Schedule consisted of five parts namely -Part IOffences under Indian Penal Code namely sections 121, 121A, 302, 304, 307, 308, 328, 327, 329, 364A, 384 to 389, 393 to 402, 467, 489A, 489B; Part II-Offences under the Immoral Traffic (Prevention) Act,1956 namely Sections 5, 6, 8 and 9. Part III- Offences under the Arms Act, 1959 namely Sections 25 to 30; Part IV-Offences under the Narcotics Drugs and Psychotropic Substances Act, 1985 and Part V- Offences under the Preventio .....

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(1) in the said Bill of 1999, firstly a non-obstante clause was proposed to override the contrary provisions contained in Part II of the Schedule I and Sections 438 & 439 of the Code, secondly every offence was made 'cognizable' irrespective of the Part II of the Schedule I of the Code, and thirdly the twin limitations on grant of bail were proposed qua every person accused of an offence under PMLA, and not on a particular class of such persons only. 12.10 However, when the PMLA came .....

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;person' accused of an offence under Part A of the Schedule'. We are satisfied that legislative intent was to create a reasonable intelligible differentia in the classification which distinguished the offenders thus grouped together in Part A from those left out of that group and grouped together in Part B for the purpose of applicability of twin conditions in grant of bail under Section 45(1) of the PMLA. 12.11 So far as the effect of the omission in Section 45(1) of words every offence .....

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a little differently from other cases of similar nature by observing as under- 34. Having carefully considered the submissions made on behalf of the respective parties and the enormous amounts of money which Respondent 1 had been handling through his various bank accounts and the contents of the note signed by Respondent 1 and notarised in London, this case has to be treated a little differently from other cases of similar nature..... 39. Lastly, the manner in which Respondent 1 had procured thr .....

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used was having three different passports in his name, after his original passport was directed to be deposited. Obviously therefore there was a reasonable apprehension that he would abscond if released on bail. The said judgment given in facts peculiar to that case, therefore, in our opinion do not lay down the ratio as is being canvassed by the petitioner that in every case under PMLA, there is embargo on grant of bail in view of section 45(1). 12.13 We have carefully scanned the Statement of .....

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ion of monetary threshold does not apply to the offences. 4. The Bill seeks to achieve the above objects. New Delhi; PRANAB MUKHERJEE The 16th December, 2011 12.14. All the offences were thus proposed to be put together in the newly proposed Part-A, irrespective of the magnitude or gravity of the scheduled offence. Entire Part B was thus effectively omitted vide the Bill of 2011. 12.15 We have seen that then existing Section 2(y) of the PMLA imposed monetary threshold of ₹ 30 lakhs for inv .....

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ier listed under Part B of the Schedule, there is no embargo of minimum value of ₹ 30 Lacs. 12.16 In our opinion the presumption of the petitioner that rigors in grant of Bail contained in Section 45(1) of PMLA extends to all the offences mentioned in such amended Part A is neither logical nor intended by the legislation. The offences which were in the earlier Part A of the Schedule (prior to 2013 Amendment) are evidently henious offences such as waging war against the country, offences un .....

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B of the Schedule. We do not find any legislative intent from the perusal of the aforesaid Statement of Objects and Reasons as incorporated in the Prevention of Money-Laundering (Amendment) Bill, 2011 to apply such stringent limitations in grant of bail to person accused of Scheduled offences earlier falling under Part B of the Schedule, but now existing in Part A thereof. On the contrary, the only object sought to be achieved by the said 2013 amendment in Schedule was to overcome this monetary .....

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offences earlier falling under Part B of the Schedule. After having perused the Statement of Objects and Reasons as incorporated in the Prevention of Money- Laundering (Amendment) Bill, 2011 which led to 2013 amendment in Schedule, we are unable to agree with the petitioner that by necessary corollary of the aforesaid 2013 amendment, the stringent limitations in grant of bail were now made applicable to all scheduled offences which are punishable for more than three years and were put together .....

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le and bailable. The framers of PMLA therefore had placed the offences in two different parts Part A and Part B. We see no legislative intent to apply twin limitations in grant of bail under Section 45(1) of PMLA qua all persons arrested on accusation of commission of even such Scheduled Offences which were earlier listed in Part B. 12.18. Therefore, in our opinion the reference to the offences under Part A of the Schedule in the context of Section 45 (1) requires to read down to apply only to t .....

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to make it an effective instrument for delivery of justice eschewing the construction which will lead to absurdity. The Hon'ble Constitution Bench in S.P. Gupta v. Union of India, 1981 Supp SCC 87 had observed as follows : 63.............The interpretation of every statutory provision must keep pace with changing concepts and values and it must, to the extent to which its language permits or rather does not prohibit, suffer adjustments through judicial interpretation so as to accord with the .....

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operate in a vacuum. It is not an antique to be taken down, dusted, admired and put back on the shelf, but rather it is a powerful instrument fashioned by society for the purpose of adjusting conflicts and tensions which arise by reason of clash between conflicting interests. It is therefore intended to serve a social purpose and it cannot be interpreted without taking into account the social,economic and political setting in which it is intended to operate. It is here that the Judge is called u .....

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is not as if it has once spoken and then turned into muted silence. It is an instrument which can speak again and in a different voice in the content of a different milieu. Let us therefore try to understand what voice this statutory provision speaks today in a democratic society wedded to the basic values enshrined in the Constitution 12.19. In Directorate of Enforcement v. Deepak Mahajan, (1994) 3 SCC 440 the Hon'ble Supreme Court while interpreting the provisions of Section 167 of the Co .....

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not to legislate, nonetheless the legislature cannot be asked to sit to resolve the difficulties in the implementation of its intention and the spirit of the law. In such circumstances, it is the duty of the court to mould or creatively interpret the legislation by liberally interpreting the statue. 25. In Maxwell on interpretation of Statutes, Tenth Edn. at page 229, the following passage is found : Where the language of a statute, in its ordinary meaning and grammatical construction, lead to .....

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language used. 26. In Seaford Court Estates Ltd. v. Asher Denning. L.J said: When a defect appears a judge cannot simply fold his hands and blame the draftsman. He must set to work on the constructive task of finding the intention of Parliament.....and then he must supplement the written word so as to give 'force and life' to the intention of the legislature. A Judge should ask himself the question how, if the makers of the Act had themselves come across this ruck in the texture of it, .....

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er Supply and Sewerage Board v. A. Rajappa approved the observations of Lord Denning statinig thus :(SCC p. 285, para 148) Perhaps, with the passage of time, what may be described as the extension of a method resembling the 'arm-chair rule' in the construction of wills, Judges can more frankly step into the shoes of the legislature where an enactment leaves its own intentions in much too nebulous or uncertain a state. 28. It will be befitting, in this context, to recall the view expresse .....

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dministrators we call it 'delegation' or authority to supply the details. 29. Subba Rao, C.J. speaking for the Bench in Chandra Mohan v. State of U.P. has pointed out that the fundamental rule of interpretation is that in construing the provisions of the Constitution or the Act of Parliament, the Court will have to find out the express intention from the words of the Constitution or the Act, as the case may be...... and eschew the construction which will lead to absurdity and give rise t .....

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Mining Examination and Chief Inspector of Mines vs. Ramjee: To be literal in meaning is to see the skin and miss the soul of the Regulation. 31. True, normally courts should be slow to pronounce the legislature to have been mistaken in its constantly manifested opinion upon a matter resting wholly within its will and take its plain ordinary grammatical meaning of the words of the enactment as affording the best guide, but to winch up the legislative intent,it is permissible for courts to take in .....

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was omitted and the Scheduled Offences falling thereunder were incorporated in Part A with the sole object to overcome the monetary threshold limit of ₹ 30 lakhs for invocation of PMLA in respect of the laundering of proceeds of crime involved in those offences. No substantive amendment was proposed with express intention to apply limitations on grant of bail as contained in Section 45(1) in respect of persons accused of such offences which were earlier listed in Part B. Therefore, twin l .....

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TS TO THE PREVENTION OF MONEY LAUNDERING ACT, 2002 145. In the Prevention of Money Laundering Act,2002 (herein referred to as the Money laundering Act), in Section 2, in subsection (1),- (i).........., (ii) in clause (y), in sub-clause (ii), for the words 'thirty lakh rupees , the words one crore rupees shall be substituted. AND Amendment 151. In the Schedule to the Money Laundering Act, after Part of Schedule A, the following Part shall be inserted, namely:- PART B OFFENCES UNDER THE CUSTOM .....

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One Crore for invocation of PMLA, now shows further shift and liberalisation in the earlier legislative intent of removing the monetary threshold for invoking PMLA. If it is construed that the limitation imposed by Section 45(1) on granting bail would apply to the persons arrested on accusation of offences which were earlier listed under Part B, but not to a person arrested on accusation of offence punishable under Section 132 of the Customs Act, 1962 which is now in Part B, the same would be un .....

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ering (Amendment) Bill, 2011. In this context we may rely on the following observations of the Constitution Bench of the Hon'ble Supreme Court in Kartar Singh v. State of Punjab, (1994) 3 SCC 569- 222. As pointed out supra, the persons who are to be tried for offences specified under the provisions of TADA Act are a distinct class of persons and the procedure prescribed for trying them for the aggravated and incensed nature of offences are under different classification distinguishable from .....

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has to see is whether the power is used for any extraneous purpose i.e. to say not for achieving the object for which the power is granted and whether the Act (TADA) has been made on grounds which are not germane or relevant to the policy and purpose of this Act and whether it is discriminatory so as to offend Article 14. In our considered opinion, the classification have rational nexus with the object sought to be achieved by the TADA Acts and Special Courts Act and consequently there is no vi .....

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rated in the Prevention of Money-Laundering (Amendment) Bill, 2011 and the above discussion and findings, have no hesitation in holding that the reference to the offences under Part A of the Schedule in the context of Section 45(1) has to be necessarily read down to apply only to those persons who are arrested under Section 19 of PMLA on accusation of money laundering, who are accused of commission of scheduled offences which were listed under the Part A of the Schedule existing prior to 2013 am .....

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e persons arrested on accusation of commission of such Scheduled Offences which were earlier listed under Part A of the Schedule. However, only the normal principles governing bail under Section 438 or 439 of the Code would apply in relation to a person arrested under PMLA on accusation of commission of such scheduled offences, which were earlier listed under Part B of the Schedule. In respect of such persons of latter category, the following observations of the Hon'ble Constitution Bench in .....

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t it is indisputable that bail is not to be withheld as a punishment. In two other cases which, significantly, are the 'Merrut Conspiracy cases' observations are to be found regarding the right to bail which deserve a special mention. In K.N. Joglekar v. Emperor it was observed, while dealing with Section 498 which corresponds to the present Section 439 of the Code, that it conferred upon the Sessions Judge or the High Court wide powers to grant bail which were not handicapped by the res .....

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ing regard to the fact that the legislature itself left the discretion of the court unfettered. According to the High Court, the variety of cases that may arise from time to time cannot be safely classified and it is dangerous to make an attempt to classify the cases and to say that in particular classes a bail may be granted but not in other classes. It was observed that the principle to be deduced from the various sections in the Criminal Procedure Code was that grant of bail is the rule and r .....

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ccused is to secure his appearance and submission to the jurisdiction and the judgment of the court, the primary inquiry is whether a recognizance or bond would effect that end. 12.25 Consequently, we find that the basis on which vires of the 2015 amendments has been challenged do not have any merit and the first two prayers in this regard are accordingly rejected. 13 The petitioner has also raised another important issue. He intends to file a composite private complaint to seek an order for inv .....

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es with a non-obstante clause- notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974).............. . This sub-section provides as to which offences under Customs Act, 1962 would be cognizable. It is therefore clear that the purpose of non-obstante clause in Section 104(4) is to override the Part II of the Schedule-I of the Code of Criminal Procedure. Being a Special Statute, the said provision under Section 104(4) would thus override whatever is stipulated to the .....

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refully perused the compilation of judgments tendered by the petitioner. He has referred to the judgment of the Division Bench of this Court in the matter of Sunil Gupta vs. Union of India, 2000 (118) ELT 8 (P&H). In the said judgment, it was held that a Central Excise officer can arrest a person without a warrant in exercise of powers under Section 13, despite the offence being a non-cognizable offence and Section 155 of the Code stipulating to the contrary. He was thus not considered at pa .....

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following paragraphs from the said judgment are extracted below :- 1. Is a Central Excise Officer debarred from arresting a person without a warrant despite the fact that he has reasons to believe that the person is liable to be punished under the Central Excise Act,1944? This is the short question that arises for consideration in these two writ petitions. .......... 24. Counsel for the respondents had referred to certain decisions to indicate that a police officer and an officer of the Central .....

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15.3 Sub-sections (4) and (5) of Section 104 of the Customs Act, 1962 were inserted by substitution vide sections 126 of Act 23 of 2012 for the earlier sub-section (4) with effect from 28.05.2012. The sub-section (4) prior to the substitution stood as under - (4) Notwithstanding anything contained in the Code of Criminal Procedure. 1898 (5 of 1898), any offence under this Act shall not be cognizable. Similarly in the case of the Central Excise Act,1944 in view of Section 9-A, all offences under .....

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on'ble Supreme Court in a batch of Writ Petitions filed under Article 32 of the Constitution of India. After considering the provisions of the Code, Customs Act, 1962, the Central Excise Act, 1944, and also the said judgment of this Court in Sunil Gupta (supra) and various other decisions, the Hon'ble Supreme Court in the matter of Om Parkash vs. Union of India, (2011) 14 SCC 1, was pleased to observe as follows - 11. Since the question of arrest is in issue in these sets of cases, Mr. R .....

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e case of the 1944 Act, in view of Section 9-A, all offences under the Act have been made non-cognizable and having regard to the provisions of Section 155, neither could any investigation be commenced in such cases, nor could a person be arrested in respect of such offence, without a warrant for such arrest. 26. Mr.Parasaran pointed out that the Preamble to the 1944 Act states that it is expedient to consolidate and amend the law relating to Central Excise duty on goods manufactured or produced .....

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mitted that the High Court had also made a distinction on the basis that while Section 13 of the 1944 Act refers to a person and not to an accused or accused person , the power under the Central Excise Act is for arrest of any person who is suspected of having committed an offence and is not an accused, but is a person who would become an accused after the filing of a complaint or lodging of an FIR, as was held by this Court in Directorate of Enforcement v. Deepak Mahajan. 30. Mr.Parasaran also .....

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objective facts with regard to commission of any offence. 31. Reference was also made to the decision of the Punjab and Haryana High Court in Sunil Gupta v. Union of India and Bhavin Impex (P) Ltd. v. State of Gujarat, in which the issue, which is exactly in issue in the present case, was considered and, as submitted by the learned ASG, it has been held that the FIR or complaint or warrant is not a necessary precondition for an officer under the Act to exercise powers of arrest...... 39. This le .....

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for the time being in force, arrest without warrant. In other words, on a construction of the definitions of the different expressions used in the Code and also in connected enactments in respect of a non-cognizable offence, a police officer, and, in the instant case an Excise Officer, will have no authority to make an arrest without obtaining a warrant for the said purpose........... 45. The decisions which have been cited by Mr. Parasaran deal mainly with powers of arrest under the Customs Act .....

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as to whether the offences under the said Act were bailable or not. 46. In the circumstances, we are inclined to agree with Mr. Rohtagi that in view of the provisions of Sections 9 and 9-A read with Section 20 of the 1944 Act, offences under the Central Excise Act, 1944, besides being noncognizable are also bailable, though not on the logic that all non-cognizable offences are bailable, but in view of the aforesaid provisions of the 1944 Act, which indicate that offences under the said Act are .....

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. 36, 37, 51, 76 and 84 of 2011 and Crl. MP No. 10673 of 2011 in WP (Cri) No. 76 of 2011, all deal with offences under the Customs Act, though the issues are exactly the same as those canvassed in the cases relating to the provisions of the Central Excise Act, 1944. 52. It was further pointed out that as in the case of Section 20 of the Central excise Act, 1944, under subsection (3) of Section 104 of the customs Act, an officer of Customs has been vested with the same power and is subject to the .....

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officer could arrest without warrant in non-cognizable cases he could not, the offences under the Excise Act, Customs Act or Foreign Exchange Regulation Act, 1973, are offences under special Acts which deal with the evasion of excise, customs and foreign exchange. According to the learned ASG, in such matters, the police officers have been restrained from investigating into the offences and arresting without warrant, but the Customs, Excise, Foreign Exchange, Food Authorities concerned, are not .....

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e Act, 1944. The provisions of the two above mentioned enactments on the issue whether offences under both the said Acts are bailable, are not only similar, but the provisions of the two enactments are also in pari materia in respect thereof. 66. The provisions of Section 104(3) of the Customs Act, 1962 and Section 13 of the Central Excise Act, 1944, vest the Customs Officers and Excise Officers with the same powers as that of a police officer in charge of a police station, which include the pow .....

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e Central Excise Act, 1944 are equally applicable in Choith Nanikram Harchandani v. Union of India [WP (Cri) No. 74 of 2010] and the other connected writ petitions in respect of the Customs Act, 1962. 68. Accordingly, on the same reasoning, the offences under the Customs Act, 1962 must also be held to be bailable and the writ petitioners must, therefore, succeed. The same are, accordingly, allowed........... 15.5 From a perusal of the above extracts from the said binding precedent of a 3-Judge B .....

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uled in Om Parkash (supra). The relevant extract of Bhavin Impex Pvt. Ltd. (supra) is as follows - 1. The key question that arises for consideration in this writ petition is as to whether the authorities under the Central Excise Act, 1944 (hereinafter referred to as 'the Act') have the power to arrest a person under Section 13 of the Act without a warrant and without filing an FIR or lodging a complaint before a Court of competent jurisdiction. 36. This Court is in agreement with the vie .....

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have any precedent value in preference to the said binding precedent of a 3-Judge bench of the Hon'ble Supreme Court in Om Parkash (supra). We therefore do not find any merit in reliance placed by the petitioner on the judgment of a co-ordinate bench of this Court in Sunil Gupta (supra). 15.6 The Hon'ble Constitution Bench of the Supreme Court in Ramesh Chandra Mehta v. State of W. B., AIR 1970 SC 940 observed that- 8. In Badku Joti Savant v. State of Mysore this Court held that the off .....

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was invested with powers of an officer-in-charge of a police station when investigating a cognizable offence, but he had no power to submit a report under Section 173 of the Code of Criminal Procedure, and on that account he was not a police officer within the meaning of Section 25 of the Evidence Act. 24............But these additional powers with which the Customs Officer is invested under the Act of 1962 do not, in our judgment, make him a police officer within the meaning of Section 25 of t .....

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ion Bench of Hon'ble Supreme Court that the Customs Officer is not a police officer are only in the context of Section 25 of the Indian Evidence Act or Article 20(3) of the Constitution of India, and not for the purpose of excluding applicability of the provisions of Code in those areas covered by Section 4(2) of the Code in respect of which the special statute do not have any overriding provision. 15.7 The Code of Criminal Procedure is - An Act to consolidate and amend the law relating to C .....

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pecial statutes such as Customs Act, 1962 and FERA investigated by the officers of Customs or the Enforcement Directorate, which are mentioned hereinafter. 15.8 In M. K. Ayoob v. Superintendent, CIU, Cochin, 1984 CRl. L. J. 949 the Hon,ble Kerala High Court was pleased to observe that- 10. Sub-Section (2) of S. 4 of the Code states that all offences under any other law (i.e. law other than the Penal Code) shall be investigated, inquired into, tried and otherwise dealt with according to the same .....

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e must govern the matter. It would follow that the provisions of sub-ss. (2) and (3) of Section 167 of the Code must apply in the case of person arrested under the Customs Act and produced before a Magistrate. 11. Learned counsel for the Customs Department pointed out that sub Section(1) of Section 167 specifically refers to a person arrested and detained in custody and a case where investigation could not be completed within 24 hours fixed by Section 57 and makes it imperative for the officer i .....

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b-s.(1) will not apply. It is also pointed out that sub-s.(2) refers to the Magistrate to whom an accused person is forwarded under this section , that is S. 167. The argument is that therefore sub-s. (2) can apply only to cases governed by Sub-S(1), that is, to persons arrested by Police Officers under the provisions of the Code and not to persons arrested by the Customs Officers under the provisions of the Act. This argument ignores S.4(2) of the Code. Section 4(2) of the Code makes all the di .....

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to matters of investigation, inquiry, trial or other matter not covered by the provisions of the Act, the parallel provisions of the code must necessarily be applied. That is the clear affect of the operation of S. 4(2) of the code. Such operation cannot be negatived merely because a section in the Code uses expression which are compatible with an offence under Penal Code or with investigation being conducted by a police officer. In relation to a person arrested under the Act, the provisions of .....

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S. I. O. DRI, Madras v. M. K. S. Abu Bucker, 1990 Cri L J 704 the Hon'ble Madras High Court was pleased to hold that- 21.........it is in the context of Section 4(2)Cr. P. C the applicability of the provisions of Section 167(2) Cr. P. C. to the person arrested under the Customs Act and produced before a Magistrate, will have to be considered. A reading of Section 4 (2) Cr. P. C. renders the provisions of the Code applicable in the field not covered by the provisions of the Customs Act. The C .....

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ocedure necessarily will have to be applied and that is the observation of the Supreme Court extracted earlier in Antulay's case (1984 Cri LJ 647). Such operation of Section 4 of the Code, cannot be just rejected merely because the Code uses expressions which are compatiable with offences under the Indian Penal Code and investigation being conducted by a police officer........ 23. The Supreme Court, while considering the position and character of a person arrested under the Sea Customs Act o .....

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icer acting under the Customs Act was not a police officer for the purpose of Section 25 of the Indian Evidence Act, vide lllias v. The Collector of Customs, Madras AIR 1970 SC 1065: (1970 Cri LJ 998) and Ramesh Chandra Mehta v. State of West Bengal AIR 1970 SC 940 : (1970 Cri LJ 863). In both the cases, it is nowhere mentioned that the provisions of Chapter XII of the Code and the provision of Section 167(2) thereof, would not be available when the person is detained under the Customs Act and p .....

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f Section 4(2) of the Code is straightaway attracted to the area of investigation, inquiry and trial of the offences under the special laws including the FERA and Customs Act. The following observations merit reproduction- 44. Section 167 is one of the provisions falling under Chapter XII of the Code commencing from Section 154 and ending with Section 176 under the caption Information to the police and their powers to investigate . Though Section 167(1) refers to the investigation by the police .....

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of the High Court of Kerala in Supdt. of Customs, C.I.U Cochin v. P. K. Ummerkutty and M. K. Ayoob v. Superintendent, C. I. W., Cochin as well as of the Gujarat High Court in N. H. Dave v. Mohmed Akhtar, Arunachalam, J. of the Madras High Court in his well-reasoned judgment in Senior Intelligence Officer v. M. K. S. Abu Bucker has observed as follows:...... 106. In our considered opinion, the view taken in O. P. Gupta and M. K. S. Abu Bucker and also of the Kerala High Court and Gujarat High Cou .....

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IR 1970 SC 940, Veera Ibrahim v. State of Maharashtra- 1976 (2) SCC 302, Poolpandi v. Superintendent, Central Excise- 1992 (3) SCC 259, Percy Rustomji Basta v. State of Maharashtra - 1971 (1) SCC 847 and Ramanlal Bhogilal Shah v. D. K. Guha- 1973 (1) SCC 696, it was observed by the Hon'ble Supreme Court in the said judgment in Deepak Mahajan (supra) that- 91. Though this Bench is bound by the decisions of all the above Constitution Benches yet these decisions are distinguishable since none o .....

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g part of this judgment, Section 167(1) falls under Chapter XII relating to Information to the Police and their powers to investigate . Sub Section (1) of Section 167 speaks of the arrest by a police officer and the follow up investigation by him.... 111. Neither the Police Act , 1861 (Act V of 1861) nor any other statute defines the expression 'police officer'. Shortly stated, the main duties of the police are the prevention, detention and investigation of crimes. As the powers and duti .....

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f police officers qua the investigation under Chapter XII of the Code yet the officers under the FERA and Customs Act are vested with certain powers similar to the powers of police officers. 121. Lastly, it falls for our consideration whether Section 4(2) of the Code of Criminal Procedure can be availed of for investigating, inquiring or trying offences under any law other than the Indian Penal Code which expression includes FERA and Customs Act etc. 126. Desai, J. in Vishwa Mitter of Vijay Bhar .....

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y the provision of sub Section (2) of Section 4 which provides that all offences under any other law- meaning thereby law other than the Indian Penal Code- shall be investigated, inquired into, tried and otherwise dealt with according to the provisions in the Code of Criminal Procedure but subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences. It w ould follow as a necessary corollary t .....

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Nayak a Constitution Bench of this Court while examining the similar question with regard to applicability of Section 4 with reference to the Prevention of Corruption Act has laid down the law thus: (SCR P.935 : SCC P-517 para 16) In the absence of a specific provision made in the statute indicating that offences will have to be investigated, inquired into, tried and otherwise dealt with according to that statute, the same will have to be investigated, inquired into, tried and otherwise dealt w .....

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s of this Code would be applicable to the extent in the absence of any contrary provision in the Special Act or any special provision excluding the jurisdiction or applicability of the Code. In fact, the second limb of Section 4(2) itself limits the application of the provisions of the Code reading, .. but subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences. 131. The submission that a .....

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ws including the FERA and Customs Act and consequently Section 167 of the Code can be made applicable during the investigation or inquiry of an offence under the special Acts also inasmuch as there is no specific provision contrary to that excluding the operation of Section 167. 136. In the result, we hold that sub-Sections (1) and (2) of Section 167 are squarely applicable with regard to the production and detention of a person arrested under the provisions of Section 35 of FERA and Section 104 .....

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of territorial and other jurisdiction but does not nullify the effect of Section 4(2). The Hon'ble Supreme Court held in Deepak Mahajan (supra) that the provisions of this code would be applicable to the extent in the absence of any contrary provision in the Special Act or any special provision excluding the jurisdiction or applicability of the Code. Therefore, if any special procedure is prescribed under any provision of PMLA or Customs Act, 1962 which is in conflict with the provisions of .....

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ra) amendments were carried out and now some of the offences specified under these Acts are made 'cognizable' and rest remain 'non-cognizable' After substitution of sub-section (4) with effect from 28.05.2012, sub-section (4) and (5) of section 104 of the Customs Act read as under - (4) Notwithstanding anything contained in the Code of Criminal Procedure. 1973 (2 of 1974), any offence relating to - (a) Prohibited goods: or (b) Evasion or attempted evasion of duty exceeding fifty .....

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ence are not defined under the Act, but are defined under the Code as follows :- 2. (c) 'cognizable offence' means an offence for which, and 'cognizable case' means a case in which, a police officer may, in accordance with the First Schedule or under any other law for the time being in force, arrest without warrant;' 2. (I) 'non-cognizable offence' means an offence for which, and 'non-cognizable case' means a case in which, a police officer has no authority to .....

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nd sending forthwith a copy of the Report under Section 157 to the jurisdictional Magistrate. But in a 'non-cognizable offence' under the Act, he would have to obtain from jurisdictional Magistrate permission to investigate and a warrant of arrest under Section 104(1) of the Act, as already held by the Hon'ble Supreme Court in Om Parkash (supra). 15.17 Unlike PMLA, there is no provision under the Customs Act, 1962 providing for filing of a Complaint for taking cognizance of the offen .....

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, except with the mandatory sanction as prescribed. Section 137 of the Customs Act, 1962 is reproduced as follows- 137. Cognizance of offences.-(1) No Court shall take cognizance of any offence under Section 132, Section 133, Section 134 or Section 135 or Section 135-A except with the requisite sanction of the Commissioner of Customs. (2) No Court shall take cognizance of any offence under Section 136,- (a) where the offence is alleged to have been committed by an officer of customs not lower in .....

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o the Central Government, of such compounding amount and in such manner of compounding as may be specified by rules. Provided that nothing contained in this sub-Section shall apply to-.... 15.18 In the Customs Act, 1962 the 'Chapter XIII-Searches, Seizure and Arrest', from Section 100 to 110A, uses the words Customs officer or proper officer or adjudicating authority . Therefore, no police officer can commence investigation, carry search, investigate, arrest , or grant provisional releas .....

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1962 there is nothing which bars setting of the criminal law into motion by any individual by making a complaint either to the officer authorized to investigate under Section 154 or 155 of the Code, or to the jurisdictional Magistrate for seeking directions under Section 155(2) or 156(3) of the Code for investigations by the officer authorized to investigate under the Act. We do not think that issuing directions to investigate would amount to taking 'cognizance'. 15.20 In the case of Nar .....

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anted by the Court. Thereafter, on 27.1.1953, he was authorised under FERA to file a complaint, which was filed on 2.2.1953. The Hon'ble Supreme Court held that cognizance was taken only on 2.2.1953 and not prior thereto when investigations were permitted time to time or arrest warrant was issued. In this regard the following observations of the Hon'ble Supreme Court in Narayandas Bhagwandas Madhavdas (supra) merit reproduction- 9........... It was, however, argued that when Mitra applie .....

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gistrate was not being asked to take cognizance of the offence. He was merely requested to grant permission to the police officer to investigate a non-cognizable offence. The petition requesting the Additional District Magistrate to issue a warrant of arrest and his order directing the issue of such a warrant cannot also be regarded as orders which indicate that the Additional District Magistrate thereby took cognizance of the offence ....... Obviously, it is only when a Magistrate applies his m .....

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law that 'cognizance' is not taken at the time of directing investigations under Section 156(3) of the Code for investigating any 'cognizable' offence. In India Carat (P) Ltd. v. State of Karnataka, (1989) 2 SCC 132, the Hon'ble Supreme Court has clearly laid down how the criminal law is set into motion as per the Code of Criminal Procedure including taking of cognizance of an offence punishable under the Indian Penal Code as follows :- 9. Before we examine the contentions o .....

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of a police station to investigate any cognizable case without the order of a Magistrate. Section 156(3) authorises a Magistrate, empowered under Section 190 to order the police to make an investigation as provided for in Section 156(1). The other provisions in the chapter from Section 157 onwards set out the powers of investigation of the police and the procedure to be followed. Section 169 prescribes the procedure to be followed by an officer in charge of a police station if it appears to him .....

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ecessary delay. Section 173(2) lays down that as soon as the investigation is completed the officer in charge of a police station should forward to a Magistrate empowered to take cognizance of an offence on a police report, a report in the prescribed form stating the various particulars mentioned in that sub-section. 10. Chapter XIV deals with the conditions requisite for initiation of proceedings and as to the powers of cognizance of a Magistrate. For our purpose it is enough if we extract Sect .....

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offence has been committed. 11. Chapter XV which contains Sections 200 to 203 deals with Complaints to Magistrates . A Magistrate taking cognizance of an offence on complaint is required by Section 200 to examine the complainant and the witnesses present, if any. Section 202 provides that a Magistrate taking cognizance of a case, upon complaint, may, if he thinks fit, postpone the issue of process against the accused, and either inquire into the case himself or direct investigation to be made b .....

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oceedings before Magistrates and Section 204 empowers a Magistrate to issue summons or a warrant as the case may be, to secure the attendance of the accused if in the opinion of the Magistrate taking cognizance of the offence there is sufficient ground for proceeding. 13. From the provisions referred to above, it may be seen that on receipt of a complaint a Magistrate has several courses open to him. The Magistrate may take cognizance of the offence at once and proceed to record statements of th .....

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he police officer or such other person as he thinks fit, for the purpose of deciding whether or not there is sufficient ground for proceeding. He may then issue process if in his opinion there is sufficient ground for proceeding or dismiss the complaint if there is no sufficient ground for proceeding. Yet another course open to the Magistrate is that instead of taking cognizance of the offence and following the procedure laid down under section 200 or Section 202, he may order an investigation t .....

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police report under Section 173(2) will contain the facts discovered or unearthed by the police as well as the conclusion drawn by the police therefrom. If the Magistrate is satisfied that upon the facts discovered or unearthed by the police there is sufficient material for him to take cognizance of the offence and issue process, the Magistrate may do so without reference to the conclusion drawn by the Investigating Officer because the Magistrate is not bound by the opinion of the police officer .....

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herefore, now well settled that upon receipt of a police report under Section 173(2) a Magistrate is entitled to take cognizance of an offence under Section 190(1)(b) of the Code even if the police report is to the effect that no case is made out against the accused. The Magistrate can take into account the statements of the witnesses examined by the police during the investigation and take cognizance of the offence complained of and order the issue of process to the accused. Section 190(1)(b) d .....

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gistrate is not bound in such a situation to follow the procedure laid down in Sections 200 and 202 of the Code for taking cognizance of a case under Section 190 (1) (a) though it is open to him to act under Section 200 or Section 202 also. The High Court was, therefore, wrong in taking the view that the Second Additional Chief Metropolitan Magistrate was not entitled to direct the registration of a case against the second respondent and order the issue of summons to him. 17. The fact that in th .....

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n the Act or Rules made thereunder by application of Section 4(2) read with Section 5 of the Code. 15.23 Therefore, so far as approaching a Magistrate and seeking directions for investigations into any offence under Customs Act, 1962 by any officer authorised under the said Act is concerned, there is no bar and the Magistrate may direct such investigations under Section 155(2) or 156(3) depending upon whether the alleged offence under Customs Act, 1962 in the complaint is 'cognizable' or .....

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ghtly different than Customs Act, 1962, although the principles governing the application of the procedure prescribed under the Code would remain the same. The offence of Money Laundering punishable under Section 4 is defined in Section 3. As per the said Section 3, the offence of money laundering necessarily requires knowingly projecting or claiming any proceeds of crime as untainted property. The property covered under the term proceeds of crime is defined in section 2(u) of PMLA, and the accu .....

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y person it is necessary that firstly there shall be such proceeds of crime , and secondly such person shall knowingly project or claim such proceeds of crime as untainted property. For conducting search or seizure under Section 17 or 18 of PMLA, the first proviso to sub-Section (1) of Section 17 and also of Section 18, create an embargo and bars such search unless in relation to the 'Scheduled Offence, either a report under Section 157 of the Code is forwarded to a Magistrate, or a complain .....

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nment by a general or a special order made in this behalf by that Government. 16.2 Therefore, so far as PMLA is concerned there is a bar on taking cognizance of any offence punishable under Section 4 except upon a complaint in writing, that too, by the specified officers only. In PMLA there is no question of filing a report under Section 173 for proceeding against the accused, and only if no case is made out after investigations, a closure report would have to be filed under Section 173. 16.3 Me .....

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Special Court notified and designated under Section 43 for the specified area, and trial shall be in accordance with Section 44 read with Section 46 of PMLA. Section 46 of PMLA specifies that save as otherwise provided under PMLA, the provisions of Code, including the provisons of bails or bond, shall apply to the proceedings before a Special Court. Section 65 of PMLA provides that- 65. Code of Criminal Procedure, 1973 to apply. The provisions of the Code of Criminal Procedure, 1973(2 of 1974) .....

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of records by the banking companies, financial institutions and intermediaries, forms for summons or authorization for search, seizure, freezing etc., forms of arrest order or acknowledgment slips for various matters and the manner of forwarding the same to the adjudicating authority, the manner of receiving the records authenticated outside India, Appeals to the Appellate Tribunal, adjudicating authority, issuance of provisional attachment orders, and taking possession of attached or frozen pr .....

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arily apply with full force. For example- In the matter of arrest under Section 19 of PMLA, the Rules notified by Central Government vide G. S. R. 446(E) dated 01.07.2005 would have overriding effect on the provisions of the Code of Criminal Procedure, 1973 to the extent anything inconsistent contained therein. Subject to any such inconsistent overriding procedure under PMLA, by application of Section 4(2) of the Code read with Section 65 of PMLA, the provisions contained in the Code relating to .....

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du vs. Manoj Kumar, Assistant Director- AIR 2016 SC 106, while declining to interfere with the order passed by High Court rejecting bail application of an accused arrested in connection with the offence under Section 3 of the PMLA observed as follows- 28. Before dealing with the application for bail on merit, it is to be considered whether the provisions of Section 45 of the PMLA are binding on the High Court while considering the application for bail under Section 439 of the Code of Criminal Pr .....

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l statute will prevail over the general provisions of the Code of Criminal Procedure in case of any conflict. 29. Section 45 of the PMLA starts with a non obstante clause which indicates that the provisions laid down in Section 45 of the PMLA will have overriding effect on the general provisions of the Code of Criminal Procedure in case of conflict between them. Section 45 of the PMLA imposes following two conditions for grant of bail to any person accused of an offence punishable for a term of .....

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gthened by the provisions of Section 65 and also Section 71 of the PMLA. Section 65 requires that the provisions of Cr. P. C. shall apply in so far as they are not inconsistent with the provisions of this Act and Section 71 provides that the provisions of the PMLA shall have overriding effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. PMLA has an overriding effect and the provisions of Cr. P. C. would apply only if they are not inconsi .....

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the provisions of the Code in view of Section 4(2) and 5 of the Code read with Section 65 and 71 of PMLA. 16.8 We find that subject to compliance with the overriding provisions contained in PMLA and the Rules made thereunder, even in PMLA, there is nothing which bars setting of the criminal law into motion by any private individual by making a complaint either- (i) to the authority under PMLA with prayer to commence investigations by registering the case under the provisions of the Code, or (ii .....

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nt in writing made by the officer specified therein. 17. Now, in view of the above, we would have to consider the following prayer made by the petitioner : iii) to hold that a private criminal complaint by the petitioner would be maintainable for setting the criminal law into motion and to seek any direction for investigation of offence under Section 3 r/w 4 of PMLA along with the offence under Part B of the Schedule inserted in PMLA w.e.f. 14.05.2015, either under Section 156(3) or under Sectio .....

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Code. There is no complaint for taking cognizance filed in Court by any officer authorized to investigate any non-cognizable offence under Customs Act, 1962. Therefore, at this stage, the prayer of the petitioner so far as PMLA is concerned is premature. Unless as indicated above the alleged Scheduled Offence under Customs Act, 1962 is registered under Section 154 and a report thereof is sent under Section 157 of the Code to the Magistrate, or, a complaint is filed for taking cognizance of the S .....

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rately explained by the Hon'ble Constitution Bench of the Supreme Court in Lalita Kumari v. State of U. P.-2014(2) SCC 1. 20. In view of the above findings, we hold that such composite prayer seeking direction for investigation of offence under Section 3 r/w 4 of PMA along with the offence under Customs Act, 1962, would not be maintainable. Therefore, in our view, the writ petition is liable to be dismissed. 21. The petitioner made oral prayer for issuance of certificate under Article 134-A .....

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