TMI Blog2017 (1) TMI 1066X X X X Extracts X X X X X X X X Extracts X X X X ..... hout issuance of warrant and without registration of an FIR or a complaint before the Magistrate - further in the case of SUNIL GUPTA, it was held that arrest can be made without a warrant. Petition dismissed - decided against petitioner. - W.P.(Crl.) No.333 of 2015 (S) - - - Dated:- 19-12-2016 - K.T.SANKARAN AND RAJA VIJAYARAGHAVAN V., JJ. FOR THE PETITIONER : ADVS. SRI.VIKRAM CHAUDHARI (SR), SRI.P.A.AUGUSTIAN, SRI.M.A.BABY, SRI.T.S.BIJU FOR THE RESPONDENT : SRI.K.M.NATARAJ, ADDITIONAL SOLICITOR GENERAL, ADV. SRI.MANU.S, CGC, ADV. SRI.C.P.UDAYABHANU, ADV. ADDL.DIRECTOR GENERAL OF PROSECUTION, ADV. DIRECTOR GENERAL OF PROSECUTION JUDGMENT K.T.Sankaran, J. The main question to be decided in this Writ Petition is whether the provisions of Sections 154 to 157 and 173(2) of the Code of Criminal Procedure would apply in respect of the proceedings under the Customs Act, in view of Section 4(2) of the Cr.P.C. and whether in respect of offences under Sections 133 to 135 of the Customs Act registration of FIR is compulsory before the person concerned is arrested and produced before the Magistrate. 2. The Writ Petition is filed by the petitioner for the iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the ratio of law laid down by the Hon'ble Supreme Court in Om Prakash and another Versus Union of India and another 2011 (14) SCC 1 , prior to summoning the petitioner or any other person for their appearance in any case or inquiry. IV. Issue writ, order or directions holding the investigations into the non-cognizable offence(s) under Section 135 of the Customs Act, 1962 without seeking order of the Magistrate as per Section 155 Cr.P.C. to be to be null and void ab initio and/or in the alternative the investigation into the cognizable offence(s) under Section 135 of the Customs Act, 1962 without recording the FIR and following the procedure prescribed under Sections 154, 156, 157, 172 Cr.P.C. etc. to be illegal non-est, null and void ab initio; without jurisdiction; unconstitutional, arbitrary, violative of Article 14 and 21 of the Constitution of India. 3. The facts of the case, which are necessary for disposing of the Writ Petition are the following. Kishin S. Loungani (writ petitioner) is engaged in export business. The petitioner is the proprietor of M/s.R.Kishin Company, Mumbai. On the basis of the intelligence gathered that M/s.R.Kishin Co., 208, Bhe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strate and he was remanded to judicial custody on 19.6.2015. The petitioner moved a bail application before the Court of the Additional Chief Judicial Magistrate (Economic Offences), Ernakulam and it was dismissed as per Ext.P10 order dated 3.7.2015. He moved for bail again and that application was also dismissed as per Ext.P11 order dated 14.7.2015. Subsequently, the petitioner moved the Sessions Court for bail, but he did not press that application and in the meanwhile, he filed the present Writ Petition on 22.7.2015. 6. The Writ Petition was admitted on 24.7.2015. On 31.7.2015, before a Division Bench of this Court (in which Justice Raja Vijayaraghavan V. was a member) it was submitted on behalf of the Senior Intelligence Officer that the investigation revealed that during the period 2012-2015, sports goods, namely, footballs, gloves and golf balls valued at ₹ 240 crores were exported through the Port of Cochin by M/s.R.Kishin Co.. An amount of ₹ 22.05 crores was claimed as drawback for the said exports, out of which ₹ 15.35 crores had already been disbursed to the petitioner. An amount of ₹ 6.69 crores was not disbursed as the drawback amount was re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee inspection of all the records of the firm especially the books of account including vouchers, challans, bills, and Bank books-records. 6. The petitioner and his wife agree to disclose their assets by filing an affidavit on the date of depositing the balance amount as aforesaid and to file an undertaking on the same day before the court below not to dispose of, alienate, encumber, part with possession of or create any third party right, title or interest in, to, upon on or in respect thereof. 7. The petitioner shall procure on affidavit an undertaking of the firm namely, M/s.Kishin and Company not to dispose of the immovable properties, any of its assets, that it will only make payments of statutory dues and dues of its workers and that it will incur any other expenses only after obtaining written permission of the 2nd respondent or with the leave of the court. It is made clear that the amount which would be deposited under Clause No.2 will be subject to the final adjudication by the statutory authority in accordance with law and procedure and without prejudice to the contentions raised by the petitioner in this writ petition. 7. Heard Sri.Vikram Chowdhary, Senior Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e officers and whether they are required to register FIR in respect of an offence under Section 135 of the Customs Act. He referred to the various provisions in the Customs Act and the Code of Criminal Procedure. He submitted that the Code of Criminal Procedure has very limited applicability in respect of matters covered by the Customs Act. The Code of Criminal Procedure applies only to the extent it is provided in the Customs Act. Registration of FIR is not a requirement under the Customs Act. Customs Officers are not police officers. The Customs Officers are at the stage of collecting materials to consider the question whether prosecution has to be launched and whether sanction is to be obtained under Section 137(1) of the Customs Act. Sri. Nataraj referred to the decisions in Dhartipakar Madan Lal Agarwal v. Rajiv Gandhi ((1987) supp. SCC 93) ; Sanjeev Coke Manufacturing Co. v. M/s.Bharat Coking Coal Ltd. and another ((1983) 1 SCC 147) ; Union of India and another v. G.M.Kokil and others (AIR 1984 SC 1022); Soni Vallabhdas Liladhar and another v. The Asst. Collector of Customs (AIR 1965 SC 481); Ramesh Chandra Mehta v. The State of W.B. (AIR 1970 SC 940); Illias v. The Collec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 4 of the Act provides for appointment of officers of customs. Section 5 provides the powers of the officers of customs. Section 104 of the Customs Act provides for the power to arrest. Every person arrested under sub-section (1) of Section 104 shall, without unnecessary delay, be taken to a Magistrate. Sub-section (3) of Section 104 reads thus: 104. Power to arrest .-- (1) ...... (3) Where an officer of customs has arrested any person under sub-section (1), he shall, for the purpose of the releasing such person on bail or otherwise, have the same power and be subject to the same provisions as the officer-in-charge of a police station has and is subject to under the Code of Criminal Procedure, 1898 (5 of 1898). Sub-section (4) provides that notwithstanding anything contained in the Code of Criminal Procedure, 1973, any offence relating to (a) prohibited goods; or (b) evasion or attempted evasion of duty exceeding fifty lakh rupees, shall be cognizable. Sub-section (4) was substituted by Act 23 of 2012. Before the amendment, the said sub-section provided that notwithstanding anything contained in the Code of Criminal Procedure, 1898, an offence under the Act shall no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding the scope and ambit of the same, no external aid is required. Sub-section (4) of Section 104 of the Customs Act contains a non-obstante clause which provides that notwithstanding anything contained in the Code of Criminal Procedure, any offence mentioned therein shall be cognizable. The provisions of the Code of Criminal Procedure are not applicable to sub-section (4) of Section 104 of the Customs Act. 13. Going by the Scheme of the Customs Act, arrest of a person need not necessarily lead to his prosecution for any offence. The purpose of arrest is also for the smooth conduct of the inquiry under the Customs Act. Section 108 of the Customs Act provides that any Gazetted Officer of customs shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making under the Act. Sub-section (3) of Section 108 states that all persons summoned shall be bound to attend and shall be bound to state the truth upon any subject respecting which they are examined or make statements and produce such documents and other things as may be required. Subsection (4) of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a police officer to a Magistrate under subsection (2) of Section 173. Section 173(2) of the Code of Criminal Procedure provides that as soon as the investigation is completed, the officer in charge of the police station shall forward to a Magistrate empowered to take cognizance of the offence on a police report, a report in the form prescribed by the State Government, stating the details mentioned in the said sub-section. Police Station is defined under Section 2(s) as any post or place declared generally or specially by the State Government, to be a police station, and includes any local area specified by the State Government in this behalf. Section 2(o) of the Code of Criminal Procedure defines officer in charge of a police station . A Customs Officer does not come either under Section 2(s) or under Section 2(o). The expressions officer in charge of a police station , on a police report and prescribed by the State Government occurring in the Cr.P.C. give a clear indication that in respect of a proceeding under the Customs Act, Section 173(2) of the Code of Criminal Procedure does not apply. Sub-section (5) (b) of Section 173 of the Cr.P.C. also does not apply to a customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Constitution of India is adequately taken care of in the Customs Act itself. It is pointed out that there is no case for the petitioner that the constitutional safeguards under Article 22(1) and 22(2) of the Constitution of India have been transgressed. 16. Section 151 of the Customs Act provides that the officers mentioned therein are empowered and required to assist the officers of customs in the execution of the Customs Act. The category of officers include officers of police under clause (c) of Section 151. The expression in the execution of this Act occurring in Section 151 of the Customs Act means on execution by the Customs Officers the officers of police are empowered and required under Section 151 of the Customs Act to assist the officers of Customs. 'Empowered' means the police officers need not search for any power to do so under the Code of Criminal Procedure. The expression are hereby required means that the police officers are duty bound to assist the officers of Customs in the execution of the Customs Act. It is not possible to equate the officers of Customs with police officers. There is clear demarcation of powers of officers of customs and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses. For every violation under the Customs Act, if First Information Report is to be registered and a final report is to be filed before the Court concerned, it would not serve the purpose for which the Act is intended. As stated earlier, only a very few out of several violations may lead to prosecution of the offender. Most of the cases would end in other measures under the Customs Act. If registration of a FIR is insisted in detection of every violation under the Customs Act, the machinery provided under the Customs Act would be paralyzed. Moreover, the people against whom violation is alleged would also be put to great trouble if FIR is to be registered for every violation. Sometimes, a violation may be of less magnitude while in some other cases organized and pre-concerted grave offence may be committed. The course of action to be adopted in different situations is to be decided at the discretion of the officers empowered under the Customs Act. There is built in safeguard for monitoring the situation in the different types of cases. If cognizance is to be taken in respect of an offence under Sections 132, 133, 134, 135 or 135A, previous sanction of the Principal Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise Act, 1944 or the Customs Act, 1962 are non-cognizable, are such offences bailable. The decision in Om Prakash and others v. Union of India and another ((2011) 14 SCC 1) was rendered before the insertion of sub-section (6) by Act 23 of 2012. By Act 23 of 2012, sub-section (6) was inserted which provided that notwithstanding anything contained in the Code of Criminal Procedure, 1973, all offences under the Act shall be bailable. Sub-section (6) was substituted by Act 17 of 2013 by which it is provided that the categories of cases covered by sub-section (6) are non-bailable. Sub-section (7) was inserted by Act 17 of 2013, which provides that save as otherwise provided in sub-section (6), all other offences under the Act shall be bailable. Since there was no provision in Section 104 of the Customs Act as to whether the offences are bailable or not, that question was considered by the Supreme Court in Om Prakash s case and it was held that the offences under the Customs Act are bailable. Sub-section (4) of Section 104 of the Customs Act was substituted by Act 23 of 2012. Before the substitution, sub-section (4) of Section 104 read as follows: Notwithstanding anything contain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1968 SC 647) , Amrendra Pratap Singh v. Tej Bahadur Prajapati and others ((2004) 10 SCC 65) , Girnar Traders v. State of Maharashtra and others ((2007) 7 SCC 555) , Arun Kumar Aggarwal v. State of Madhya Pradesh and others ((2014) 13 SCC 707) , Union of India and another v. Manik Lal Banerjee (AIR 2006 SC 2844) and Divisional Controller, KSRTC v. Mahadeva Shetty and another ((2003) 7 SCC 197). 22. In Lalitha Kumari v. Government of Uttar Pradesh and others ((2014) 2 SCC 1) , the issue which arose for consideration was whether a police officer was bound to register a First Information Report (FIR) upon receiving any information relating to commission of a cognizable offence under Section 154 of the Code of Criminal Procedure, 1973 and the police officer has the power to conduct a preliminary enquiry in order to test the veracity of such information before registering the same. The decision in Lalitha Kumari s case does not as such apply to the present case. 23. The decision in State of Haryana and others v. Bhajan Lal and others (1992 Supp.(1) SCC 335) is also not helpful in resolving the question involved in the present case. 24. In Soni Vallabhdas Liladha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -A of the Sea Customs Act is inadmissible has, also no substance. Why Article 20(3) of the Constitution a person who is accused of any offence may not be compelled to be a witness against himself. The guarantee is, it is true, not restricted to statements made in the witness box. This Court in State of Bombay v. Kathi Kalu Oghad, 1962-3 SER 10 = (AIR 1961 SC 1808) observed at p.37 (of SCR) = (at p.1817 of AIR). To be a witness means imparting knowledge in respect of relevant facts by oral statement or a statement in writing, made or given in Court or otherwise. To be a witness in its ordinary grammatical sense means giving oral testimony in Court. Case law has gone beyond its strict literal interpretation of the expression which may now bear a wider meaning, namely, bearing testimony in Court or out of Court by a person accused of an offence, orally or in writing. But in order that the guarantee against testimonial compulsion incorporated in Article 20(3) may be claimed by a person it has to be established that when he made the statement sought to be tendered in evidence against him, he was a person accused of an offence. Under Section 171-A of the Sea Customs Act, a Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... search of any place could not be made by a Customs Officer of his own accord: he had to apply for and obtain a search warrant from a Magistrate. Under Section 105 of the Customs Act, 1962, it is open to the Assistant Collector of Customs himself to issue a search warrant. A proper officer is also entitled under that Act to stop and search conveyances: he is entitled to release a person on bail, and for that purpose has the same powers and is subject to the same provisions as the officer in charge of a police station is. 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 the Evidence Act. He is, it is true, invested with the powers of an officer-in-charge of a police station for the purpose of releasing any person on bail or otherwise. The expression or otherwise does not confer upon him the power to lodge a report before a Magistrate under Section 173 of the Code of Criminal Procedure. Power to grant bail, power to collect evidence, and power to search premise or conveyances without recourse to a Magistrate, do not make him an officer-in-charge of a po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise Officer will have to make a complaint under clause (a) of Section 190 of the Cr.P.C. 27. In Superintendent of Customs v. Ummerkutty others (1984 K.L.T.1) , it was held that an officer acting under the provisions of the Customs Act is not a police officer or an officer-in-charge of a police station as contemplated in the Code of Criminal Procedure. Therefore, he cannot initiate action under Section 190(1)(b) of the Cr.P.C. He is entitled to submit a complaint under Section 190(1)(a) of the Code. 28. In Percy Rustomji Basta v. The State of Maharashtra (AIR 1971 SC 1087), following the decision in Ramesh Chandra Mehta v. The State of West Bengal (AIR 1970 SC 940) , the Supreme Court held that a Customs Officer conducting an inquiry under Section 107 or Section 108 of the Customs Act is not a police officer and the person against whom inquiry is made is not an accused and the statement made by such person in that inquiry is not a statement made by a person accused of an offence . The decision in Illias v. The Collector of Customs, Madras (AIR 1970 SC 1065) was also followed in the decision in Percy Rustomji Basta v, The State of Maharashtra (AIR 1971 SC 1087 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... procedure prescribed under the Code or under the special procedure, if any, prescribed under the special Acts. Therefore, the word 'investigation' cannot be limited only to police investigation but on the other hand, the said word is with wider connotation and flexible so as to include the investigation carried on by any agency whether he be a police officer or empowered or authorised officer or a person not being a police officer under the direction of a Magistrate to make an investigation vested with the power of investigation. .......... ........ 120. From the above discussion it cannot be said that either the Officer of Enforcement or the Customs Officer is not empowered with the power of investigation though not with the power of filing a final report as in the case of a police officer. .......... ......... 132. For the aforementioned reasons, we hold that the operation of 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 and consequently Section 167 of the Code can be made applicable during the investigation or inquiry of an offence u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enior counsel for the petitioner relied on the decision of the Gujarat High Court in Rakesh Manekchand Kothari v. Union of India and others (Special Criminal Application (Habeas Corpus) No.4247 of 2015) , a case under the Prevention of Money Laundering Act, 2002, wherein it was held: 20. Therefore, irrespective of whether the offence under PMLA is held to be cognizable or non-cognizable, we find that respective procedure prescribed under the Code ought to have been followed in absence or any inconsistent provision under the PMLA concerning investigation and arrest amongst other proceedings. If the offence under PMLA is held to be cognizable, it was mandatory to comply with sections 154 157 apart from sections 167(1) and 172 of the Code. If the offence under PMLA is held to be non-cognizable, it was mandatory to comply with section 155 apart from sections 167(1) and 172 of the Code. We are unable to find any merit in the contention of learned counsel for the respondents as well as their reply that those provisions of the Code are inapplicable merely because provisions of the Code used the word police officer and they are officers of Enforcement Directorate. Such interpret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 135. (vii) The Customs Officer is a revenue officer primarily concerned with the detection of smuggling and enforcement and levy of proper duties and prevention of entry into India of dutiable goods without payment of duty and of goods of which the entry is prohibited. 35. In Bhavin Impex pvt. Ltd. s case , the Gujarat High Court further held that: 31. The above discussion leads to the inevitable conclusion that Section 13 of the Central Excise Act empowers the Central Excise Officers to arrest a person whom he has reason to believe to be liable to punishment under the Act without issuance of warrant and without registration of an FIR or a complaint before the Magistrate. 36. In Sunil Gupta v. Union of India (2000 (118) E.L.T.8 (P H)), the Punjab Haryana High Court held thus: 15. It is apparent that the proceedings conducted by an officer of the Central Excise are vitally different from the investigation by a police officer. It is implicit that a person who is making a statement before a Central Excise Officer can be called upon to sign the statement. On a combined reading of Sections 13 and 14, it is clear that an officer of the Central Excise is not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in Sunil Gupta v. Union of India (2000 (118) E.L.T. 8 (P H)). We are not in agreement with the decision taken by the Gujarat High Court in Union of India and another v. Rakesh Manekchand Kothari another . 38. Learned senior counsel for the petitioner relied on the decision in Gorav Kathuria v. Union of India and others (CRWP No.595 of 2016 (O M) dated 11.5.2016) rendered by the Punjab and Haryana High Court which arose under the Prevention of Money Laundering Act. In that case certain provisions of the PMLA and Section 145(ii) of the Finance Act were challenged. The Punjab and Haryana High Court held that subject to the overriding provisions of PMLA and Rules made thereunder, the provisions of the Code of Criminal Procedure would necessarily apply to arrest, search and seizure, attachment, confiscation, investigation, prosecution and all other proceedings under PMLA. It is also in consonance with Section 4(2) read with Section 5 of the Code of Criminal Procedure. The learned senior counsel for the petitioner submitted that Crl.A.No.737 of 2016 was filed before the Supreme Court against the judgment in Gorav Kathuria v. Union of India and others and the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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