1/78 wp 3818-18 J.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
CRIMINAL WRIT PETITION NO. 3818 OF 2018
1 Adani Enterprises Limited, a
Company incorporated under the
Companies Act, 1956, having its
Registered Office at
Adani House, Mithakali Circle,
Navrangpura, Ahmedabad.
2 Adani Power Limited, a Company
incorporated under the Companies
Act having its registered office at
Adani House, Mithakali Circle,
Navrangpura, Ahmedabad .. Petitioners
Versus
1 Union of India, through Secretary
Ministry of Home Affairs, New Delhi
2 Directorate of Revenue Intelligence
through Addl.Director General, having
its office at UTI Building, 4th floor,
13, Sir Vithaldas Thackersey Marg,
New Marine Lines, Mumbai-20
3 State of Maharashtra .. Respondents
…
Mr. Vikram Nankani, Sr. Counsel with Mr.Atul Nanda i/b HKS
Legal for the petitioner.
Tilak
::: Uploaded on – 17/10/2019 18/10/2019 05:27:47 :::
2/78 wp 3818-18 J.doc
Mr. Maninder Singh, Sr. Counsel with Advait M. Sethna with
Prabha Bajaj, Tejvir Singh Bhatia i/b Ms.Ruju Thakker for
Respondent Nos.1 and 2.
Mr.Deepak Thakare, P.P with Mr.S.R. Shinde, APP for the State.
CORAM: RANJIT V. MORE AND
AND BHARATI DANGRE, J.
RESERVED : 2 nd JULY, 2019
PRONOUNCED : 17th OCTOBER, 2019
JUDGMENT :-(Per Smt.Bharati Dangre, J)
1 A pivotal but significant issue which arise in the
present Writ Petition is whether the Respondent – Directorate of
Revenue Intelligence has legally and validly commenced the
investigation against the petitioner into alleged commission of
offence punishable under Section 135 of the Customs Act, 1962
and whether or not, based on the said investigation set into
motion, it is entitled to take recourse to the provisions of Section
166-A of the Code of Criminal Procedure, 1973 for issuance of
the Letter of Rogatory by the Magistrate.
Tilak
::: Uploaded on – 17/10/2019 18/10/2019 05:27:47 :::
3/78 wp 3818-18 J.doc
Before we grapple with the said question of law, we
would like to recount the bare minimum facts for answering the
said question.
2 The petitioner is alleged to be involved in the over
valuation of coal of Indonesian origin and it is alleged that during
the period from October 2010 to March 2016, Adani Group of
Companies had imported about 1300 consignments of
Indonesian Coal and majority of the import came to be routed
through their group subsidiary company i.e. Adani Global Private
Limited (AGPTE), Singapore and Adani Global (AGFZE),
Dubai. It is noted that both the said companies are 100%
subsidiaries of a Mauritius Based Company i.e. Adani Global
Limited (AGL) which is an 100% owned subsidiary of Adani
Enterprises Limited i.e. petitioner no.1 before us. It is alleged that
the petitioner acting in connivance with the individuals and
companies grossly overstated the import value of coal as
compared to the actual export value ex-Indonesia and prevalent
Tilak
::: Uploaded on – 17/10/2019 18/10/2019 05:27:47 :::
4/78 wp 3818-18 J.doc
international prices and it is alleged that with an object of
siphoning of the money abroad and to avail higher power tariff
compensation, this course was adopted so that it can sold the
power to the power utility public sector undertakings in India.
The precise accusation allege that the comparative analysis of
value of Indonesian coal declared to Indian customs by the Adani
Group of Companies as against the values declared by the
Indonesian exporters to the Indonesian authorities at the time of
export was to the tune of Rs.930 crore and this over valuation was
noticed in 231 consignments. The petitioner is also charged with
availing the benefit of nil duty or concessional rate of duty on
these imports in terms of the ASEAN- India Free Trade
Agreement. According to the DRI, the petitioner was importing
coal from Indonesia through its subsidiary companies and
availing the benefits of the concessional rates of duty under the
AIFTA on one hand and on the other hand, the petitioner was
engaged in grossly overstating the value of the imported coal and
this was apparent from the mismatch in the values.
On a counter affidavit filed by the Dy. Directorate,
Tilak
::: Uploaded on – 17/10/2019 18/10/2019 05:27:47 :::
5/78 wp 3818-18 J.doc
DRI, Mumbai, it is stated that the act of mis-declaration of grade
and value of the goods imported and failure to declare the correct
grade and value before the Custom Authorities at the time of
imports, made the goods liable for confiscation under Section
111(m) of the Customs Act 1962 and the persons involved are
liable for a penalty under Section 112(b)(iii) and 114AA of the
Customs Act, 1962. The act of the petitioner is alleged to fall
within the purview of Section 132 for making a false declaration,
statement or document in material particular and the affidavit
also allege the petitioners are guilty of evasion of duty by mis-
declaration of value, which amounts of an offence punishable
with Imprisonment upto 7 years. Thus, to put it pithily the DRI
allege the offences punishable under Section 132 and Section 135
against the petitioner.
3 In the background of the aforesaid allegations,
requisition under Section 108 of the Customs Act, 1962 were
issued to the petitioner to submit documents/information relating
to purchase and sell of Indonesian coal by their subsidiary
Tilak
::: Uploaded on – 17/10/2019 18/10/2019 05:27:47 :::
6/78 wp 3818-18 J.doc
companies in Singapore and Dubai. It was responded to by the
petitioner stating that the AGPTE AGFZE are independent
legal entities incorporated abroad and DRI may directly
communicate with them, if at all it desired to do so. On
requisitions being issued to AEL to submit the documents since
both AGPTE and AGFZE were the step down subsidiaries of
AEL, there was no response. This alleged non co-operation of the
Adani Group of Companies as well as their banks in submitting
the transaction relating documents/information compelled the
DRI to prefer application before the Addl. Chief Metropolitan
Magistrate, 8th Court Mumbai with a request to issue Letter of
Rogatory to the authorities at Singapore,UAE, Hongkong, British
Virgin Irelands in order to secure the necessary information. The
Addl. Chief Metropolitan Magistrate obliged the authorities after
examining the applications made by the DRI and the case records
and issued four letters of Rogatory under the Mutual Legal
Assistance Treaty (MLAT) on different dates. The Letter of
Rogatory to Singapore was issued on 2/8/2016 and forwarded to
the competent authority in Singapore. It is this course of action
Tilak
::: Uploaded on – 17/10/2019 18/10/2019 05:27:47 :::
7/78 wp 3818-18 J.doc
which is oppugned in the petition instituted by it.
4 In support of the petitioner, we have heard the
learned senior counsel Shri Nankani who has over simplified his
case by stating that the provision of issuance of Letter of Rogatory
contained in Section 166-A of Cr.P.C can be availed of only when
the investigation commence under Chapter XII of the Code
either in form of Section 154 in respect of cognizable offence or
Section 155 in form of non-cognizable offence. Shri Nankani
would submit that since the DRI has summarized its allegation
against the petitioner in terms of Section 132 and 135 of the
Customs Act, undisputedly, being a complete Code, the
authorities are empowered to exercise the powers available to it
under Chapter XIII of the Customs Act. He would invite out
attention to Section 104 which confers a power of arrest on the
officer of customs who has a reason to believe that any person in
India or within the Indian Custom waters has committed an
offence punishable under Section 132, 133, 135, 135-A or 136
may arrest such person. According to Shri Nankani, sub-section
Tilak
::: Uploaded on – 17/10/2019 18/10/2019 05:27:47 :::
8/78 wp 3818-18 J.doc
(4) of Section 104 which begins with a non-obstante clause
enumerate that ‘notwithstanding anything contained in the Code
of Criminal Procedure’, any offence relating to prohibited goods
or evasion or attempted evasion of duty exceeding Rs.50 lakhs
shall be cognizable and in terms of sub-section (5) all other
offences under the Act shall be non-cognizable. Sub-section (6),
according to Shri Nankani, again opens with a non-obstante
clause and any offence punishable under Section 135 relating to
evasion or attempted evasion of duty exceeding Rs.50 lakhs or
prohibited goods notified under Section 11 or any import or
export of any goods which has not been declared in accordance
with the provisions of the Act and the market price of which
exceeds Rs.One crore or where there is a fraudulent availment of
or attempt to avail of drawback or any exemption of duty if the
amount of duty or drawback exceeds Rs.50 lakhs, the offence is
non-bailable and barring this, all other offences under the Act are
bailable.
5 It is the submission of Shri Nankani that taking the
Tilak
::: Uploaded on – 17/10/2019 18/10/2019 05:27:47 :::
9/78 wp 3818-18 J.doc
case of DRI, it is alleged that coal of Indonesian origin imported
by Adani Group of Companies on payment of applicable and
assessed custom duties, has been misdeclared on account of the
mismatch of grade and over-valuation and automatically it follows
that it is not a case of evasion of custom duty. His further
submission is to the effect that except the cases which are
classified under Section 135(4) all other offences under theAct
are non-cognizable, only two type of cases are thus cognizable, the
one concerning offences relating to either “prohibited goods” or
“evasion of attempted evasion of duty exceeding Rs.50 lakhs”.
Thus, according to Shri Nankani, the act alleged against him do
not attract the prohibited goods category and he submit that there
is no notification specifying coal as prohibited good issued by the
Central Government under Section 135(1)(i)(c) of the Customs
Act. Thus, as per Shri Nankani, the offences with which he is
indicted is a non-cognizable offence falling under sub-section (5)
of Section 104 of the Customs Act. His argument is focused in
the backdrop of the fact that the classification of the alleged
offence against the petitioner under Section 135 of the Customs
Tilak
::: Uploaded on – 17/10/2019 18/10/2019 05:27:47 :::
10/78 wp 3818-18 J.doc
Act and the investigation was illegally commenced and
conducted, in a non-cognizable offence, despite there being no
order under Section 155(2) read with Section 4(2) of the code of
Criminal Procedure. The submission of Shri Nankani is to the
effect that an investigation can only be initiated by lodging an
FIR and when such an information relating to commission of a
cognizable offence is received by an officer in-charge of a police
station, he shall follow course of action as set down in Section 154
of the Code of Criminal Procedure and result into the final report
under Section 173 of the Code. Another mode, according to Shri
Nankani, is when an information is given to an officer in-charge
of a police station of commission of a non-cognizable offence
when according to him, the course to be followed is enumerated
in Section 155 of the Code. In such a situation, he would invite
our attention to the bar created under sub-section (2), where no
police officer is empowered to investigate a non-cognizable case
without the order of the magistrate having power of try such a
case or commit the same for trial. The anchor sheet of the
argument of Shri Nankani is Section 4(2) of the Code and what
Tilak
::: Uploaded on – 17/10/2019 18/10/2019 05:27:47 :::
11/78 wp 3818-18 J.doc
follows from it i.e. all the provisions of the Code to the extent of
the same which are not inconsistent with the provisions of the Act
are applicable to the investigations under the Customs Act and
according to him, the application/operation of Section 4(2)
cannot be restricted or confined only to the provisions of Section
166-A to the exclusion of all the other provisions of the Code to
the extent that the same are not inconsistent with the provisions
of the Act. According to him, Chapter XIII of the Customs Act
which confers specific power on the customs Officer in regards to
‘searches, seizure and arrest’ do not contain any provision as to
how, in what manner, any information of commission or
attempted commission or preparation for commission of an
offence is to be dealt with. Further, there is no provision
stipulating procedure as to how and in what event pursuant to the
information, an officer would investigate or would not investigate
and there is no departure contained in the Customs Act to
exclude the procedure prescribed in Section 155 of the Code
including sub-section (2) and sub-section (3). Shri Nankani has
placed reliance on the following judgments :
Tilak
::: Uploaded on – 17/10/2019 18/10/2019 05:27:47 :::
12/78 wp 3818-18 J.doc
(i) Illias Vs. Collector of Customs, Madras
(19969) 2 SCR 613
(ii) Poolpandi Ors Vs. Superintendent, Central Excise Ors
(1992) 3 SCC 259
(iii) Directorate of Enforcement Vs. Deepak Mahajan Ors
(1994) 3 SCC 440
(iv) Om Prakash Anr Vs. UOI Anr
(2011) 14 SCC 1
(v) Gorav Kathuria Vs. Union of India
2017 (348) ELT 24 (P H)
(vi) Gorav Kathuria Vs. Union of India Ors
(Order dated 12.8.2016 passed by the Hon’ble Supreme
Court in Cri.Appeal No. 737/2016)
(vii) Kishin S. Loungani Vs. Union of India
[2017 (352) ELT 433 (Ker)]
(viii) Kishin S. Loungani Vs. Union of India
(Order dated 06.09.2018 passed by the Hon’ble Supreme
Court in SPL Cri.M P No.6051 of 2017)
According to him, the judgment in case of Om Prakash (supra)
is a bright line which luminates the course of action to be
chartered by Custom Authority/DRI. We would deal with the
same at a subsequent point of time since what we have noted is
that the judgment which are sought to be relied by the learned
Tilak
::: Uploaded on – 17/10/2019 18/10/2019 05:27:47 :::
13/78 wp 3818-18 J.doc
senior counsel appearing for the DRI overlap and each of them
making a distinction of the applicability of the ratio culled out
from the said judgments.
6 In support of the respondent, we have heard the
learned senior counsel Shri Maninder Singh, who would aver that
the present petition is an attempt to frustrate the investigation
being carried out by the DRI and is nothing but an attempt to
thwart an entirely legal investigation being carried out by it into a
serious allegation. The learned senior counsel would submit that
section 166-A of the Cr.P.C which is a unique provision contained
in the Code and which operates with a non-obstante clause can be
justiciably invoked by any Investigating Officer, including a
Custom officer, when it occurs to him, during investigation into
an offence that evidence may be available in a country or place
outside India and he may then approach any criminal Court with
a letter of Request to the Court or an authority in that country or
place competent to deal with such request to examine any person
who is acquainted with the facts and circumstances of the case
Tilak
::: Uploaded on – 17/10/2019 18/10/2019 05:27:47 :::
14/78 wp 3818-18 J.doc
and to record his statement or direct such a person to produce any
document or thing which is in his possession pertaining to the
case and forward all the evidence so collected to the Court issuing
such letter. According to Shri Singh, every such statement
recorded or document or thing received in pursuant of the said
exercise shall be deemed to be the evidence collected during the
course of investigation under Chapter XII of the Code of
Criminal Procedure. He would seriously contest the proposition
advanced by Shri Nankani to the effect that the investigation of
DRI cannot be said to commence without following the
mandatory procedural safeguard contained in Section 154 to 157
of the Code of Criminal Procedure and the same is ex-facie illegal
and void ab initio. Learned senior counsel submit that the
aforesaid sections of the Code of Criminal Procedure use the term
“Officer in-charge of a police station” and cannot be made
applicable to customs officer who are not police officers. He
would take his submission further and submit that investigation
of all offences conducted by the police officers is regulated by
Cr.P.C. However, there is no concept of FIR, if the inquiry and
Tilak
::: Uploaded on – 17/10/2019 18/10/2019 05:27:47 :::
15/78 wp 3818-18 J.doc
investigation is carried under any special statute and in terms of
Sections 4 and 5 of Cr.P.C. It is clarified that where special
provisions are provided, the provisions of Cr.P.C would not
apply. According to learned Senior counsel, the Customs Act is
equipped with self-contained provisions relating to inquiry of
offences, relating to import, export and smuggling of goods and
punishment thereof and wherever required the Act has provided
the Magisterial intervention and the DRI is bound to conduct an
inquiry in terms of the provisions of the said enactment. The
learned senior counsel would further argue on the basis of the
‘Report of the Select Committee’ on the Customs Bill 1962, and
the proceedings of the debate in the Parliament and submit tha
the legislature did not intend Magisterial intervention for
initiation of investigation under the Customs Act. The learned
Senior counsel would also advance his submissions on Section 5
of the Code which provides for “Saving” and according to him,the
position that emerges from Section 5 of the Code is to the effect
that the provisions of Cr.P.C would not have any effect on any
special or local laws or any special jurisdiction unless there is any
Tilak
::: Uploaded on – 17/10/2019 18/10/2019 05:27:47 :::
16/78 wp 3818-18 J.doc
specific provision to the contrary in the entire code. According to
him, section 4 of the Code which deals with both the offences
under IPC as well as offences under special laws, what is eminent
is the segregation of two clauses contained in section 4; Section
4(1) deal only with offences under the penal code and 4(2) deal
exclusively with the offences under the special laws.
On a conjoint reading, according to learned senior
counsel, the position that emerges is that the provisions of Cr.P.C.
including Section 166-A which are not contrary or inconsistent
with the scheme envisaged in the customs Act 1962 would apply
to the investigation carried out by the Custom Officer under the
Customs Act, 1962 and thus he is entitled to seek letter of
Request Letter of Rogatory under Section 166-A of the Cr.P.C.
He uses the judgment of the Apex Court in Deepak Mahajan
case as an ace up his sleeves to buttress his submission that the
term “Investigation” is to be understood in a broad sense and
according to him, the non-obstante clause in Section 166A of
Cr.P.C is in relation to the entire code and not for a particular
chapter or section and as per Shri Maninder Singh, Section 166-A
Tilak
::: Uploaded on – 17/10/2019 18/10/2019 05:27:47 :::
17/78 wp 3818-18 J.doc
is a completely independent provision standing apart and what is
required to be complied with is only the procedural format
contained in the said section. He has also relied upon the
following judgments :
(i) Ramesh Chandra Mehta Vs. UOI
AIR 1970 SC 940(ii) Illias Vs. Collector of Customs
AIR 1970 SC 1065(iii) Directorate of Enforcement Vs. Deepak Mahajan
(1994) 3 SCC 440(iv) Sunil Gupta Vs. Union of India
1999 SCC Online P H 350(v) Bhavin Impex Pvt.Ltd Vs. State of Gujarat
2009 SCC Online Guj 9965(vi) Kishin S. Loungani Vs. Union of India
2016 SCC online Ker 307327 Customs Act enacted in the year 1962 aim to prevent
illegal import and export and it provides for implementation and
collection of duty on goods imported and exported in the country.
In order to consider the rival claim of the parties, it would be
apposite to briefly refer to the statutory scheme of the Customs
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
18/78 wp 3818-18 J.docAct, 1962 with special reference to the powers of the custom
officer akin to that exercised by a police officer under the Code of
Criminal Procedure.
The Customs Act, 1962 aims to sternly and
expeditiously deal with smuggled cases and curb the dents on the
Revenue thus caused. Section 11 of the Act of 1962 empowers
the Central Government by notification in the Official Gazette,
to prohibit either absolutely or subject to such conditions as may
be specified in the notification, the import or export of goods of
any specified description. Chapter IVA to IVC relate to detection
of illegal imported goods, prevention and disposal thereof. It
contains a mechanism for levy of custom duty at such rates as may
be specified under the Customs Tariff Act, 1975. Chapter V
contains an entire mechanism for assessment of such duty along
with an power to grant exemption from duty. It also provides for
refund of export/import duty in certain cases and the manner in
which refund can be claimed. Power of provisional attachment to
protect revenue in certain cases is also conferred on the proper
officer. It contain provisions for confiscation of goods and
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
19/78 wp 3818-18 J.docconveyance and imposition of penalty when any goods are
imported contrary to any prohibition imposed by or under the
Act or under any other law for the time being in force. It also
contains provision for levy and exemption from custom duties
and set out the procedure for clearance of imported and export
goods. The Act provides for constitution of an adjudicating
authority and an entire mechanism for finalization of the decision
of said Authority. For implementation of the provisions of the
Act, classes of officers are designated as officers of Customs who
are empowered to exercise the powers and discharge the duties
conferred or imposed under the Act.
The said enactment which empowers the Officers of
Customs to deal with the prohibition and incidentally prevent or
detect the illegal exports of goods, can be broadly classified into
two parts i.e. the first part being exercise of power by the Custom
Officer for the purpose of ensuring the collection of Revenue by
preventing smuggling and enforcement and levy of proper duties
and prevention of entry into India of dutiable goods without
payment of duty and goods of which entry is prohibited. These
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
20/78 wp 3818-18 J.docadjudicatory powers relate to exercise of the Revenue powers
ensuring and assuring the Revenue accruing to the State. The
second limb of the powers of the Customs Officer relate to the
inquiry into suspected cases of smuggling and invest the Custom
Officer with powers akin to that of the police officer. The scheme
of Customs Act in Chapter XIII, which is an important chapter
confer power of search, seizure and arrest and further Chapter
XIV confer the power of confiscation of goods and conveyance
and imposition of penalties. Deriving power under Section 100
and 101, Custom Officer is empowered to search any person if he
has reason to believe that such person is secreted about his person,
any goods, liable to confiscation or any documents relating
thereto. Section 104 is the power to arrest conferred on a
Customs Officer, to be exercised when he has reason to believe
that any person in India or within the Indian custom waters has
been guilty of an offence punishable under Section 132 or Section
133 or Section 135 or Section 135A or Section 136, he may arrest
such a person. The necessary safeguard of informing the person
so arrested of the grounds of arrest is also implicitly provided for.
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
21/78 wp 3818-18 J.docSection 105 is the power conferred to search any goods,
documents or things if the officer has reason to believe that any
goods liable for confiscation or documents or things are secreted
in any place. Pertinent to note that sub-section (2) of Section 105
specify that the provisions of Cr.P.C relating to searches, shall
apply to such searches, subject to modification that sub-section
(5) of Section 165 of the Code shall be read by substituting
"Principal Commissioner of Customs or Commissioner of
Customs: in place of the word "Magistrate". Section 106 is the
power to stop and search conveyances. Section 107 empowers
the Custom Officer to examine any person during the course of
inquiry in connection with smuggling and Section 108 is the
power to summon the person to give evidence and produce
documents in any inquiry which the officer is making. A
reciprocal obligation is created under Section 108A to furnish
information sought for by the Custom Officer and Section 108B
prescribes penalty for failure to furnish information. The person
so summoned is duty bound to attend and to state the truth upon
any subject in respect of which he is examined or makes statement
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
22/78 wp 3818-18 J.docand produce documents and other things as may be required and
every such inquiry is deemed to be a judicial proceedings within
the meaning of Section 193 and 228 of IPC. Section 110
authorizes the proper Officer to seize such goods as he has reason
to believe which are liable to confiscation. Section 111 and
Section 113 provides for confiscation of the goods which are
improperly imported/ exported. Section 112, 114, 114A and
114AA, 116 and 117 provides for contravention of the provisions
contained in the Act and which call for imposition of penalty.
Chapter XV contains a provision for Appeal and set out the
procedure in Appeal and also the powers of the Appellate
Tribunal.
According to the DRI, the petitioner is alleged to
have misdeclared the grade and value before the custom
authorities and at the time of import and the goods are liable for
confiscation in terms of Section 111(m) of the Customs Act and
the persons involved are liable to penalty under Section 112(b)(ii)
and Section 114AA of the Customs Act. The offences as per DRI
are punishable with imprisonment for a term which may extend
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
23/78 wp 3818-18 J.docto two years or with fine or both under Section 132 of the
Customs Act. The DRI has also alleged that they are liable to be
indicted under Section 135 for knowingly misdeclaring the value
of the goods or for any prohibition for the time being imposed
under the Act and the maximum punishment provided under the
said section is upto 7 years with fine. The offences and
prosecutions are contained in Chapter XVI and we would
reproduce Section 135, since the petitioners are charged with an
offence under Section 135.
135(1) Without prejudice to any action that may be taken
under this Act, if any person--(a) is in relation to any goods in any way knowingly
concerned in misdeclaration of value or in any fraudulent
evasion or attempt at evasion of any duty chargeable thereon
or of any prohibition for the time being imposed under this
Act or any other law for the time being in force with respect to
such goods; or(b) acquires possession of or is in any way concerned in
carrying, removing, depositing, harbouring, keeping,
concealing, selling or purchasing or in any other manner
dealing with any goods which he knows or has reason to
believe are liable to confiscation under section 111 or section
113, as the case may be; or(c) attempts to export any goods which he knows or
has reason to believe are liable to confiscation under section
113; orTilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
24/78 wp 3818-18 J.doc(d) fraudulently avails of or attempts to avail of
drawback or any exemption from duty provided under this
Act in connection with export of goods, he shall be punishable,--
(i) in the case of an offence relating to,--
(A) any goods the market price of which exceeds one crore of
rupees; or(B) the evasion or attempted evasion of duty exceeding thirty
lakh of rupees; or(C) such categories of prohibited goods as the Central
Government may, by notification in the Official Gazette,
specify; or(D) fraudulently availing of or attempting to avail of
drawback or any exemption from duty referred to in clause(d), if the amount of drawback or exemption from duty
exceeds thirty lakh of rupees, with imprisonment for a term
which may extend to seven years and with fine: Provided that
in the absence of special and adequate reasons to the contrary
to be recorded in the judgment of the court, such
imprisonment shall not be for less than one year;(ii) in any other case, with imprisonment for a term
which may extend to three years, or with fine, or with both.]
2[(2) If any person convicted of an offence under this section
or under sub-section (1) of section 136 is again convicted of an
offence under this section, then, he shall be punishable for the
second and for every subsequent offence with imprisonment
for a term which may extend to seven years and with fine:
Provided that in the absence of special and adequate reasons
to the contrary to be recorded in the judgment of the court
such imprisonment shall not be for less than 3[one year].8 The position that emerges from the aforesaid
statutory scheme invest the Custom Officer with the power to
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
25/78 wp 3818-18 J.docsearch a person, to arrest a person and to examine the person and
summon a person to give evidence and to produce documents
and also empower him to seize the goods, documents and things
which are liable for confiscation. The Custom Officer is also
empowered to release a person on bail. The cognizance of the
offences under the Customs Act, 1962 can be taken by the Court
only on the previous sanction of the Principal Commissioner of
Customs or Commissioner of Customs.
9 At this stage, it would be apposite to reproduce Section
104 which confers a power on the Officer of Customs to arrest a
person and it also classifies the offences as under :
104 Power to arrest :- (1) If an officer of customs
empowered in this behalf by general or special order of
the Commissioner of Customs has reason to believe that
any person in India or within the Indian customs
waters has committed an offence punishable under
section 132 or section 133 or section 135 or section 135A
or section 136, he may arrest such person and shall, as
soon as may be, inform him of the grounds for such
arrest.(2) Every person arrested under sub-section (1)
shall, without unnecessary delay, be taken to
Magistrate.(3) Where an officer of customs has arrested any
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
26/78 wp 3818-18 J.docperson 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).(4) Notwithstanding anything contained in the
Code of Criminal Procedure, 1898 (2 of 1974), any
offence relating to -(a) prohibited goods; or
(b) evasion or attempted evasion of duty exceeding
fifty lakh rupees, shall be cognizable.(5) Save as otherwise provided in sub-section (4),
all other offences under the Act shall be non-cognizable.(6) Notwithstanding anything contained in the
Code of Criminal Procedure, 1973 (2 of 1974), an offence
punishable under Section 135 relating to -(a) evasion or attempted evasion of duty
exceeding fifty lakh rupees,
or(b) prohibited goods notified under Section
11 which are also notified under sub-clause (C)
of clause (i) of sub-section (1) of section 135; or(c) import or export of any goods which have
not been declared in accordance with the
provisions of this Act and the market price of
which exceeds one crore rupees; or(d) fraudulently availing of or attempt to
avail of drawback or any exemption from duty
provided under this Act, if the amount of
drawback or exemption from duty exceeds fiftyTilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
27/78 wp 3818-18 J.doclakh rupees, shall be non-bailable.
(7) Save as otherwise provided in sub-section (6),
all other offences under this Act shall be bailableThe section empower the Officer of Custom to release a person
arrested by him on bail and in doing so, he exercise the same and
is subjected to the same provisions as the Officer in-charge of the
police station and is subject to the provisions of the Code of
Criminal Procedure. An offence relating to prohibited goods or
evasion or attempted evasion of duty exceeding 50 lakhs is
cognizable and all other offences under the Act are non-
cognizable. At this point, it would be relevant to note that this
provision has been has been substituted with effect from 28 th May
2012 and prior to the said amendment and all offence under the
Customs Act were classified as non-cognizable. Further, an
offence punishable under Section 135 relating to clauses (a) to (d)
of sub-section (6) are non-cognizable and all other offences under
the Act are bailable.
10 The stanchion of the arguments advanced on both the
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
28/78 wp 3818-18 J.docsides is as to whether the offences which are cognizable/non-
cognizable under the Customs Act, 1962 must undertake the
route of Section 154 and 155 of the Cr.P.C and therefore, we
deem it appropriate to briefly refer to the scheme of Chapter XII
contained in the Code of Criminal procedure.
Code of Criminal Procedure is Code which
consolidated and amended the law relating to Criminal
Procedure. It is enacted in exercise of powers conferred under
Entry II of VII Schedule. It is necessarily procedural in nature
and prescribe the procedure to be followed while dealing with the
penal provisions. As an exception, it also contain substantive
provision like the maintenance proceedings under Section 125.
The Code prescribe hierarchy of criminal courts and define their
territorial division. We are concerned with Chapter XII of the
Code.
11 Chapter XII of the Cr.P.C can be broadly dissected
into two distinct category i.e. information in cognizable offences
- Section 154 and information as to non-cognizable offences -
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
29/78 wp 3818-18 J.docSection 155. In respect of every information relating to
commission of a cognizable offence, the procedure set out under
Section 154 is a mandate of the Code and the culmination of the
said process is Section 173, when the investigation result in a
police report being forwarded to the Magistrate empowered to
take the cognizance. Section 155 set out the procedure to be
followed in respect of an information given to an Officer in-
charge of a police station of a non-cognizable offence and Section
155 enjoin that the Officer in-charge shall enter or caused to be
entered the substance of the information in a book maintained by
him in the manner prescribed by the State Government and refer
the information to the Magistrate. Sub-section (2) of Section 155
creates an embargo on the police officer to investigate a non-
cognizable case without order of a Magistrate having power to try
such case or committing the case for trial. Any police officer
receiving said order may then exercise the same powers in respect
of the investigation (except the power to arrest without warrant)
as officer in-charge of a police station may exercise in a cognizable
case. Chapter XII of the Cr.P.C thus rule out the entire procedure
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
30/78 wp 3818-18 J.docfollowed by a police officer when he undertakes an investigation
into a cognizable and non-cognizable offence and consummation
of his act on submission of a report to Magistrate in Section 173.
By virtue of Section 190, Magistrate is empowered to take
cognizance of any offence in any of the modes set out in the
section i.e. (a) upon receiving a complaint of facts which
constitute such offence, (b) upon a police report of such facts (c)
upon information received from any person other than a police
officer or upon his own knowledge that such offence has been
committed. The submission of DRI is to the effect it is not
imperative for the Custom Officer to seek permission of the
Magistrate as contemplated under sub-section (2) of Section 155
of Cr.P.C and the broader submission of the petitioner is to the
effect that in absence of following the said pathway of Section
155(2) of Cr.P.C which happens to be a part of Chapter XII of
Cr.P.C, it is not open for the officer of the custom to take recourse
to the provisions contained in form of Section 166-A which
pertains to issuance of Letter of Rogatory.
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
31/78 wp 3818-18 J.doc12 Once we have the spectrum of the two enactments
before us, we would like to highlight the interplay between the
operation of the two enactments and their impact on each other
so as to unravel the conundrum. Section 4(1) of the Code of
Criminal Procedure rule that the procedure contained in the
Code would govern the offences under the Indian Penal Code
whereas sub-section (2) of Section 4 determine the situation
when the special offences would follow the procedure set out in
the Code. The said section can be said to act as a bridge before
embarking upon an investigation either into the offences under
the IPC or a special statute. Section 4 reads as under :-
4. Trial of offences under the Indian Penal Code and
other laws.(1) All offences under the Indian Penal Code (45 of
1860 ) shall be investigated, inquired into, tried,
and otherwise dealt with according to the provisions
hereinafter contained.(2) All offences under any other law shall be
investigated, inquired into, tried, and otherwise
dealt with according to the same provisions, 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.Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
32/78 wp 3818-18 J.doc13 It is trite that the Code of Criminal Procedure
regulates the procedure for investigation/ inquiry and trial for the
offences not only under the Indian Penal Code but also of special
offences but in case of latter, application of Cr.P.C is subject to
provision (if any), of such special law relating to inter alia, the
procedure for investigating, inquiry, trial or otherwise. In other
words, if a special law creates an offence, it may provide for
special forum for the purpose of its trial and also a special
procedure for investigation therein or the authorities in whom the
power is conferred for the purpose of implementation of the said
special law, or it may confer jurisdiction to deal with such process.
The special enactment may also specify the nature of the special
law offence i.e. whether it is cognizable or non-cognizable, or
bailable or non-bailable. The offences under the Indian Penal
Code, in terms of Section 4(1) are to be investigated inquired
into, tried and otherwise dealt with according to the provisions of
the Code of Criminal Procedure. All offences under the special
law would also be dealt with the same provisions but subject to
any provisions contained in the special enactment for the time
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
33/78 wp 3818-18 J.docbeing in force, regulating the manner of investigation/ inquiry or
trial or otherwise dealing with such offence.
14 In A.R. Antulay Vs. Ramdas Sriniwas Nayak 1 the
Apex Court in reference to Section 4 of the Code of Criminal
Procedure has observed as under :
20. Sec. 4 (1) provides for investigation,
inquiry or trial for every offence under the
Indian Penal Code according to the provisions of
the Code. Sec. 4 (2) provides for offences under
other law which may be investigated, inquired
into, tried and otherwise dealt with according to
the provisions of the Code of Criminal Procedure
but subject to any enactment for the time being
in force regulating the manner or place of
investigation, inquiring into, trying or otherwise
dealing with such offences. 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 with according to the Code of
Criminal Procedure. In other words, Code of
Criminal Procedure is the parent statute which
provides for investigation, inquiring into and
trial of cases by criminal courts of various
designations.17 Now the Code of Criminal Procedure1 1984(2) SCC 500
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
34/78 wp 3818-18 J.docprescribed only four methods of taking
cognizance of an offence whether it be aMagistrate or a Sessions Court is for the time
being immaterial. The Code prescribes four
methods for taking cognizance upon a
complaint, or upon a report of the police officer
or where the Magistrate himself comes to know
of the commission of offence through some other
source and in the case of Sessions Court upon a
commitment by the Magistrate. There is no other
known or recognized mode of taking cognizance
of an offence by a criminal court. Now if Court of
special Judge is a criminal court, which atleast
was not disputed, and jurisdiction is conferred
upon the presiding officer of the Court of special
Judge to take cognizance of offences
simultaneously excluding one of the four
recognised modes of taking cognizance, namely,
upon commitment by a Magistrate as set out in
Sec 193, the only other method by which the
Court of special Judge can take cognizance of an
offence for the trial of which it was set up, is any
one of the remaining three other methods known
to law by which a criminal court would take
cognizance of an offence, not as an idle formality
but with a view to initiating proceedings and
ultimately to try the accused. If the language
employed in Sec. 8 (1) is read in this light and in
this background that a special Judge may take
cognizance of offence without the accused being
committed to him for trial, it necessarily implies
that the Court of special Judge is armed with
power to take cognizance of offences but that it is
denied the power to take cognizance on
commitment by the Magistrate. This excludes the
mode of taking cognizance under Sec. 193. Then
remains only Sec. 190 which provides various
methods of taking cognizance of offences byTilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
35/78 wp 3818-18 J.doccourts. It is idle to say that Sec. 190 is confined
to Magistrate and special Judge is not a
Magistrate. We shall deal with the position of a
special Judge a little later. The fact however
remains that the Court of the special Judge as
the expression is used in sub-sec. (3) of Sec. 8 is a
criminal court and in view of Sec. 9 it is under
the appellate and administrative control of the
High Court. It must take cognizance of offences
with a view to trying the same but it shall not
take it on commitment of the accused to the
court. As a necessary corollary, it must appear
that the special Judge can take cognizance of
offences enumerated in Sec. 6 (1)(a) and (b) upon
a complaint or upon a police report or upon his
coming to know in some manner of the offence
having been committed.15 In persuading ourselves to accept the submission of
Shri Maninder Singh that the Customs Act is a special statute and
is self sufficient, we would be advert to Section 104 of the
Customs Act which bifurcates the offences to be either
cognizable/non-cognizable, bailable/non-bailable. Sub-section
(4) of Section 104 makes any offence relating to prohibited
goods; or evasion or attempted evasion of duty exceeding Rs.50
lakhs to be cognizable, notwithstanding anything contained in the
Code of Criminal Procedure. All other offences under the Act are
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
36/78 wp 3818-18 J.docnon-cognizable. The offences under sub-section (6) of Section
104 are declared to be non-bailable notwithstanding anything
contained in the Cr.P.C and this covers the offence punishable
under Section 135 relating to evasion or attempted evasion of
duty exceeding 50 lakhs of rupees or prohibited goods notified
under Section and also notified under sub-clause (c) of clause (i)
of sub-section(1) of Section 135. By virtue of Section 135, the
evasion of duty or prohibition, depending upon the category of
the goods is punishable with Imprisonment for a term which may
extend to 7 years and with fine, in case where the market price of
the goods exceed Rs.One crore or the evasion or the attempted
evasion of duty exceed 50 lakhs rupees or it is a fraudulent
availment or an attempt to avail drawback and if the amount of
the drawback or exemption duty exceeds 50 lakhs. In any other
case, the offence under Section 135 is punishable with
Imprisonment for a term which may extend to three years or with
fine or with both. Thus, the offence under the Customs Act are
categorized as cognizable/non-cognizable and bailable/non-
bailable, notwithstanding anything contained in the Code of
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
37/78 wp 3818-18 J.docCriminal Procedure.
Pertinent to note that first schedule appended to the
Code of Criminal Procedure which provides for classification of
offences and in Part-I it classify offences under the IPC. Part-II
classify the offences against other laws and stipulate that if the
offences punishable with death, imprisonment for life or
imprisonment for more than 7 years, then, it is cognizable and
non-bailable, and so is the case if the offence punishable with
Imprisonment for three years and upwards, but not more than
seven years. However, if the offence is punishable with
imprisonment for less than three years or with fine, then it is non-
cognizable and bailable. The offence of evasion of duty or
prohibition under Section 135 is made cognizable and non-
bailable even if the punishment to be imposed is Imprisonment
for a term which is less than three years or with fine or with both.
When the legislature intended to depart from Part-II of Schedule
I of the Code of Criminal Procedure, it categorically provided so
by insertion of a non-obstante clause.
Perusal of the Customs Act 1962 would reveal that
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
38/78 wp 3818-18 J.docthe powers have been conferred on the custom officer in regards
to an inquiry and Chapter XIII confers power of search, seizure
and arrest on the officer of custom and wherever the legislature
intended a deviation from the Code of Criminal Procedure, it has
specifically made the provisions to the exclusion of the Code of
Criminal Procedure and such deviation is to be found in the
classification of offences as contained in Section 104. Section 137
of the Customs Act, 1962 impose a restriction on a Court taking
cognizance of the offence under Section 132, 133, 134 or Section
135 or Section 135A except previous sanction of the Principal
Commissioner of Customs or Commissioner of Customs. The
manner of trial of offences under the Customs Act other than the
one punishable under clause (ii) of sub-section (1) of Section 135
or under sub-section (2) of the said section to be tried summarily
is again a provision which open with non-obstante clause and
stands to the exclusion of whatever contained in the Code of
Criminal Procedure.
16 Careful examination of the provisions of the Act of
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
39/78 wp 3818-18 J.doc1948 would reveal that whenever the legislature intended a
departure from the procedure contemplated under the Code, it
expressly provided so. As a necessary corollary, if an offence is
cognizable, then, it is either made bailable or non-bailable under
Part-I of Schedule-I of Cr.P.C. Under the Customs Act, though
the offence punishable under Section 135 are made cognizable, it
is also made bailable. In case of a cognizable offence, which in
terms of the Code of Criminal Procedure is an offence 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.
A non-cognizable offence in terms of Section 2(l) of the Code of
Criminal Procedure means an offence in which a police officer has
no authority to arrest without warrant.
17 Code of Criminal Procedure contains a detailed
procedure for investigation into cognizable as well as non-
cognizable offences. Chapter XII of the Code of Criminal
Procedure to which we had made a reference above includes
Section 154 and 155. The procedure to be followed would thus
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
40/78 wp 3818-18 J.docdepend upon whether the offence is cognizable or non-
cognizable. Part-I of Schedule I of Code of Criminal Procedure
catalogue whether the offences are cognizable or non-cognizable
and accordingly, whether the investigation would proceed under
Section 154 or under Section 155. Under the Customs Act,
special enactment, the offences are cognizable/ non-cognizable
but the said enactment do not charter any course of action to be
followed when the Custom Officer receives an information either
of a cognizable case or a non-cognizable case. Undisputedly, he is
vested with powers akin to that of a police officer in regard to
search of a suspected person and search of the premises coupled
with the power of seizure of goods, documents and things and
also the power to examine persons and to summon persons to
give evidence and produce documents. The Customs Act do not
contain any provision guiding the custom officer to follow the
procedure in case of a cognizable/non-cognizable offence inspite
of its classification. As far as the offence being classified under
the Customs Act to be bailable/non-bailable, sub-section (3) of
Section 104 specifically confer a power on the officer of customs
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
41/78 wp 3818-18 J.docwho has arrested any person on a belief that he has committed an
offence punishable under Section 132, 133, 135 or Section 135A
or Section 136 to release such a person on bail and while doing
so, he is conferred the same power and is directed to be subjected
to the same provisions as the officer in-charge of a police station
and is subject to under the Code of Criminal Procedure. The
manner in which he would carry an investigation, when he
receives an information in respect of a cognizable offence/non-
cognizable offence is found to be conspicuously missing in the
statutory scheme of Customs Act. The procedure for
investigation or its culmination which is to be found in Chapter
XII of the Code in respect of cognizable and non-cognizable
cases is apparently missing in the special enactment. The police
officer in case of a cognizable offence on investigation in the
manner set out in Chapter XII of the Code of Criminal Procedure
takes it to the Court of law by submitting his final report under
Section 173, in case of a cognizable offence. In respect of a non-
cognizable offence, when an officer in charge of a police station
receives an information, after entering substance of the
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
42/78 wp 3818-18 J.docinformation in a book maintained by him, he is bound to refer
the informant to the Magistrate and will not investigate a non-
cognizable case without order of a Magistrate having power to try
such case or commit the case for trial. This police officer, on
receipt of the order, from the Magistrate is then empowered to
exercise the same powers in respect of the investigation (except
the power to arrest without warrant) as an officer in-charge of a
police station may exercise in a cognizable case. On such an
investigation being completed, he would file his report and
thereupon the Magistrate to whom the report is forwarded may
take cognizance of the offence. This procedure for investigation
and of submission of the report to the competent court is not to
be found in the Customs Act though the offences are classified
into cognizable/non-cognizable. In absence of any procedure
being prescribed for investigation of such offences under the
special enactment, recourse must necessarily be had to sub-section
(2) to Section 4. The necessary sequitur is that in case of an
offence which is made cognizable under the Customs Act, the
procedure contemplated under Section 154 and in case of an
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
43/78 wp 3818-18 J.docoffence which is non-cognizable, the procedure under Section
155 would thus become imperative. Sub-section (2) of Section 4
which acts like an exemplar would govern the manner of
investigation under the Custom Act by the provisions contained
in the Code of Criminal Procedure in absence of any special
provision in the Customs Act prescribing the manner of
investigation.
18 In Gangula Ashok Vs. State of Andhra Pradesh ,2
while dealing with Scheduled Castes and Scheduled Tribes
(Prevention of Atrocities Act) 1999, where a special court was
constituted for trial of offences under the said Act, while
determining the issue as to whether this Special Court can take
cognizance of the offences directly as a Court of Original
Jurisdiction without the case being committed to it by a
Magistrate in view of Section 193 of Code of Criminal Procedure,
by making reference to Section 4(2), it was held that though
under the Act, a particular Court of Sessions in each district is
sought to be specified as a Special Court, the Court of Sessions is
2 2000(2) SCC 504,Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
44/78 wp 3818-18 J.docspecified to conduct a trial and it is only this Court which is
competent to try the offences under the Act and evidently the
legislature wanted the Special Court to be Court of Sessions. A
reference was made to Section 193 of the Code which imposes an
interdict on all Court of Sessions against taking cognizance of any
offence has a Court of original jurisdiction. In this background,
the Apex Court observed thus :
12 We have noticed from some of the decisions
rendered by various High Courts that contentions were
advanced based on Sections 4 and 5 of the Code as
suggesting that a departure from Section 193 of the Code
is permissible under special enactments. Section 4 of the
Code contains two sub-sections of which the first sub-
section is of no relevance since it deals only with offences
under the Indian Penal Code. However, sub-section (2)
deals with offences under other laws and hence the same
can be looked into. Sub- section (2) of Section 4 is
extracted below :"All offences under any other law shall be
investigated, inquired into, tried, and otherwise
dealt with according to the same provisions, 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."13 A reading of the sub-section makes it clear that
subject to the provisions in other enactments all offences
under other laws shall also be investigated, inquiredTilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
45/78 wp 3818-18 J.docinto, tried and otherwise dealt with under the provision
of the Code, This means that if other enactment contains
any provision which is contrary to the provisions of the
Code, such other functions would apply in place of the
particular provision of the Code, If there is no such
contrary provision in other laws, then provisions of the
code would apply to the matters covered thereby. This
aspect has been emphasised by a Constitution Bench of
this Court in paragraph 16 of the decision in A.R.
Antulay v. Ramdas Sriniwas Nayak and Anr., [1984] 2
SCC 500."14 Nor can Section 5 of the Code be brought in aid
for supporting the view that the Court of Session
specified under the Act can obviate the interdict
contained in Section 193 of the Code as long as there is
no provision in the Act empowering the Special Court to
take cognizance of the offence as a court of original
jurisdiction. Section 5 of the Code reads thus :"5. Saving. - Nothing contained in this Code shall, in
the absence of a specific provision to the contrary, affect
any special or local law for the time being in force, or
any special jurisdiction or power conferred, or any
special form of procedure prescribed, by any other law
for the time being in force."19 In Jeewan Kumar Raut Vs. CBI, 3 while
determining the application scope and implication of Section 22
of the Transplantation of Human Organs Act, 1994 (TOHO)
posed an issue whether Section 22 operates as a bar to the
applicability of Section 167(2) and 173(2) of the Code of
3 2009(7) SCC 526
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
46/78 wp 3818-18 J.docCriminal Procedure. The said enactment which empowered CBI
as being an authorized agency to investigate offences by
registering FIR, by virtue of Section 22 prohibited taking of
cognizance except on a complaint made by appropriate authority.
The appellant - accused who sought bail under Section 167(2) of
Cr.P.C was turned down since it was held that the provisions of
Section 167(2) Cr.P.C is not attracted for offence under TOHO as
police report under Section 173 Cr.P.C by necessary implication is
forbidden under Section 22 of the said Act. The Apex Court
observed thus :
25 Section 22 of TOHO prohibits taking of
cognizance except on a complaint made by an
appropriate authority or the person who had made a
complaint earlier to it as laid down therein. Respondent,
although, has all the powers of an investigating agency,
it expressly has been statutorily prohibited from filing a
police report. It could file a complaint petition only as an
appropriate authority so as to comply with the
requirements contained in Section 22 of TOHO. If by
reason of the provisions of TOHO, filing of a police report
by necessary implication is necessarily forbidden, the
question of its submitting a report in terms of Sub-
section (2) of Section 173 of the Code did not and could
not arise. In other words, if no police report could be
filed, Sub- section (2) of Section 167 of the Code was not
attracted.Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
47/78 wp 3818-18 J.doc26 It is a well-settled principle of law that if a
special statute lays down procedures, the ones laid down
under the general statutes shall not be followed. In a
situation of this nature, the respondent could carry out
investigations in exercise of its authorization under
Section 13(3)(iv) of TOHO. While doing so, it could
exercise such powers which are otherwise vested in it.
But, as it could not file a police report but a complaint
petition only; Sub-section (2) of Section 167 of the Code
may not be applicable.27 The provisions of the Code, thus, for all intent
and purport, would apply only to an extent till conflict
arises between the provisions of the Code and TOHO and
as soon as the area of conflict reaches, TOHO shall
prevail over the Code. Ordinarily, thus, although in
terms of the Code, the respondent upon completion of
investigation and upon obtaining remand of the accused
from time to time, was required to file a police report, it
was precluded from doing so by reason of the provisions
contained in Section 22 of TOHO.36 We are, however, not oblivious of some
decisions of this Court where some special statutory
authorities like authorities under the Customs Act have
been granted all the powers of the investigating officer
under a special statute like the NDPS Act, but, this
Court has held that they cannot file chargesheet and to
that extent they would not be police officers. [See Ramesh
Chandra Mehta v. The State of West Bengal AIR 1970
SC 940, Raj Kumar Karwal v. Union of India (1990) 2
SCC 409]20 As per the learned senior counsel Shri Maninder
Singh, the judgment of the Apex Court in case of Directorate of
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
48/78 wp 3818-18 J.docEnforcement Vs. Deepak Mahajan Ors, 4 provides an
answer to the controversy in hand, we have extensively referred
to the said judgment. The issue before the Apex Court was as
regards the applicability of the provisions of Section 167(1) and
(2) of the Code, when a person is arrested under Special Act like
section 35(1) of FERA or Section 104(1) of Customs Act and he
is produced before the Magistrate under Section 35(2) or Section
104(2) thereof. The Apex Court while determining the said issue
explored the terminology employed under Section 167 i.e.
'Accused', 'Person arrested', 'Arrest'. After taking note of the fact
that the Code of Criminal Procedure gives a power of arrest not
only to a police officer and the Magistrate but also under
circumstances or given situation to private persons, Their
Lordships derived a distinction between the word 'custody' and
'arrest'. After making a detailed reference to the scheme
contained in the Customs Act and it analyzed in role of a 'proper
officer' under the Customs Act in the following words :-
The 'proper officer' referred to in various provisions of
the Customs Act, who is to perform any function4 1994(3) SCC 440
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
49/78 wp 3818-18 J.docunder the said Act, means the officer of Customs who
is assigned those functions by the Board or Collector
of Customs as defined under clause (34) of Section 2
of Customs Act, but it does not include the officers of
Police or any other officers enumerated under Section151. Therefore the police officers have no independent
role to play in exercise of the powers under the
Customs Act as in Sections 45 and 46 of the FERA.It formulated the issue for consideration in para 22 to the
following effect :22 In the background of the above principle of
statutory interpretation, now coming to and dealing with
the legal challenges, several vital queries have to be
considered and answered. Those are:(1) Whether the jurisdiction of the Magistrate to authorise
detention of an arrestee produced before him either in
judicial custody or otherwise under Section 167(2) of the
Code is completely excluded or ousted by the absence of
any specific provision in the FERA or the Customs Act
empowering the Magistrate to authorise the detention' of
the arrestee under the Code?(2) When the jurisdiction of the Magistrate to authorise
detention is not expressly forbidden by any specific
exclusionary provision and when such exclusion of
jurisdiction cannot be clearly implied or readily inferred,
does the detention authorised by the Magistrate either to
judicial custody or otherwise become ab initio void and
illegal and can the Magistrate be said to have exceeded or
abused his authority?(3) What is the procedure to be followed and the order
required to be passed by the Magistrate when a person
arrested under the FERA or Customs Act is presented
before him?(4) When the Officer of Enforcement or Customs Officer is
not inclined to release the arrestee on bail or otherwise byTilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
50/78 wp 3818-18 J.docexercising the power under sub-section (3) of Section 35 of
FERA or Section 104 of the Customs Act, a s the case may
be, but produces the arrestee before a Magistrate as
mandated by sub-section (2) of the abovesaid provisions,
will it not be a legal absurdity to say that the Magistrate
should forthwith let go the arrestee without ordering
detention and also extension of further detention or
remand? And(5) Whether the Magistrate has no other alternative except
to release that arrested person, produced before him on
bail or direct him to be freed unconditionally and
whether the Magistrate is completely stripped off his
authority to refuse bail and take him to judicial custody?The above questions are some of the legal challenges
canvassed before the Full Bench of the High Court, which
by a majority opinion, has negatively answered.In the backdrop of Section 167, it observed thus :
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 other powers to
investigate". Though Section 167(1) refers to the
investigation by the police and the transmission of the
case diary to the nearest Magistrate as prescribed
under the Code etc., the main object of sub- section (1)
of Section 167 is the production of an arrestee before a
Magistrate within twenty-four hours as fixed by
Section 57 when the investigation cannot be completed
within that period so that the Magistrate can take
further course of action as contemplated under
subsection (2) of Section 167.21 The important issue which is relevant for the purpose
of our consideration is the observation in para 50. In light of the
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
51/78 wp 3818-18 J.docsaid question framed when Their Lordship proceeded to answer
the same question it was held in order to invoke Section 167(1) it
is not an indispensable pre-requisite condition that in all
circumstances, the arrest should have been effected only by a
police officer and none else and that there must necessarily be
records of entries of the case diary. It was held that a mere
production of an arrestee with competent Magistrate by an
authorized officer or an officer empowered to arrest,
notwithstanding the fact that he is not a police officer in a strict
sense (on a reasonable belief) that the arrestee has been guilty of
an offence punishable under the provisions of the Special Act, is
sufficient for the Magistrate to take that person in custody on
being satisfied that the Arresting Officer is legally competent to
make the arrest, there exists ground for arrest and the provisions
of the Special Act in regard to the arrest serve the purpose under
Section 167(1) of the Code. Observations of the Apex Court in
paragraph 56 is relevant
56 No doubt, there is no investigation by any
officer equivalent or comparable to an officer-in-charge
of police station or a police officer in a proceedingTilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
52/78 wp 3818-18 J.docunder any of these two special Acts as contemplated
under Chapter XII of the Code. But what Section 167
envisages is that the arrestee is an accused or accused
person against whom there is well-founded information
or accusation requiring an investigation. Firstly the
reason given in the impugned judgment for holding
that Section 167(1) is neither replaced nor substituted
by any provision of the special Acts is that the arrestee
by the authorised officer or empowered officer under the
FERA or Customs Act respectively cannot be said to be
'an accused' or 'accused person' which expressions are
used in Section 167 or 'accused of an offence' which
expression is used in Article 20(3) of the Constitution
and in Sections 25 and 27 of the Evidence Act. In
support of this reasoning, some decisions of this Court
have been relied upon about which we would deal at
the later part of this judgment.22 The Apex Court in Deepak Mahajan (supra) has re-
iterated the view taken earlier that the Officer of Enforcement or
a Custom Officer is not a police officer though such officers are
vested with the powers of arrest or analogus powers by making
reference to the judgment in case of Ilias Vs. Collector of
Customs, Madras, 5 It held that the Court had taken a view that
the said Officer under the Special Act are not vested with the
powers of a police officer qua investigation of an offence under
Chapter XII of the Code including power to forward a report
5 (1969) 2 SCR 613
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
53/78 wp 3818-18 J.docunder Section 173 of the Code of Criminal Procedure. It
however recognized that though the said Officer is not
undertaking investigation contemplated under Chapter XII, yet
they enjoy some analogus powers such as arrest, seizure,
interrogation etc. A statutory duty is also cast on them to inform
the arrestee of the ground of arrest.
Learned Senior counsel Shri Maninder Singh has
relied upon the observations of the Apex Court in paragraph 16
to the effect that the word 'investigation' cannot be restricted only
for police investigation, but it has a wider connotation and it
should be flexible enough to include investigation carried on by
any agency whether he is a police officer or empowered or
authorized officer or a person not being a police officer under the
direction of a Magistrate and vested with the power of
investigation. However, the Apex Court in the following
paragraphs made following observations :-
118 M.P. Thakkar, C.J. of the Gujarat High Court
(as he then was) speaking for a Division Bench in N.H.
Dave, Inspector of Customs v. Mohmed Akhtar34 while
examining the import of Section 104 of the Customs Act
has ruled thus:Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
54/78 wp 3818-18 J.doc"The expression 'investigation' has been defined in
Section 2(h). It is an inclusive definition. No doubt it
will not strictly fall under the definition of
'investigation' insofar as the inclusive part is
concerned. But then it being an inclusive definition
the ordinary connotation of the expression
'investigation' cannot be overlooked. An
'investigation' means search for material and facts
in order to find out whether or not an offence has
been committed. It does not matter whether it is
made by the police officer or a customs officer who
intends to lodge a complaint."We are in total agreement with the above view of
M.P. Thakkar, C.J.119 The word 'investigation' though is not shown in
any one of the sections of the Customs Act, certain powers
enjoyed by the police officer during the investigation are
vested on the specified officer of customs as indicated in
the table given above. However, in the FERA the word
'investigation' is used in various provisions, namely
Sections 34, 36, 37, 38 and 40 reading, "... any
investigation or proceeding under this Act....... though
limited in its scope.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.The Apex Court also dealt with Section 4(2) of the Code and as
to whether it can be availed of for investigating, inquiring or
trying offences under any other law, other than the Indian Penal
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
55/78 wp 3818-18 J.docCode including FERA and Customs Act, etc, and then it proceeds
to answer in the following words :-Para 122 and 123
122 Section 4(2) of the Code corresponds to
Section 5(2) of the old Code. Section 26(b) of the Code
corresponds to Section 29 of the old Code except for a
slight change. Under the present Section 26(b) any
offence under any other law shall, when any court is
mentioned in this behalf in such law, be tried by such
court and when no court is mentioned in this behalf,
may be tried by the High Court or other court by which
such offence is shown in the First Schedule to be
triable. The combined operation of Sections 4(2) and
26(b) of the Code is that the offence complained of
should be investigated or inquired into or tried
according to the provisions of the Code where the
enactment which creates the offence indicates no
special procedure.123 We shall now consider the applicability of
provisions of Section 167(2) of the Code in relation to
Section 4(2) to a person arrested under FERA or the
Customs Act and produced before a Magistrate. As we
have indicated above, a reading of Section 4(2) read
with Section 26(b) which governs every criminal
proceeding as regards the course by which an offence is
to be tried and as to the procedure to be followed,
renders the provisions of the Code applicable in the
field not covered by the provisions of the FERA or
Customs Act.23 The conclusions derived are summed up by the Apex
Court in para 128 and 132 in the following words :Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
56/78 wp 3818-18 J.doc128 To sum up, Section 4 is comprehensive
and that Section 5 is not in derogation of Section 4(2)
and it only relates to the extent of application of the Code
in the matter of territorial and other jurisdiction but
does not nullify the effect of Section 4(2). In short, 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. In fact, the second limb of
Section 4(2) itself limits he 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."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 under the
special Acts also inasmuch as there is no specific
provision contrary to that excluding the operation of
Section 167.24 The said judgment of the Apex Court is a clear
answer to the submission raised before us. It is no doubt true that
the term 'investigation' has been attempted to be given a wider
meaning by Their Lordships. However, the ratio that flows from
it in unequivocal terms lay down that in absence of any special
procedure being carved out in the special enactment, the
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
57/78 wp 3818-18 J.docprovisions contained in the Code and continue to govern the area
of investigation, inquiry and trial of the offences under the
Customs Act.
25 The learned Senior counsel Shri Nankani has placed
heavy reliance in case of Om Prakash Anr Vs. Union of
India, 6. The argument of Shri Maninder Sigh is that the verdict
of the Apex Court in the said case only deals with power or arrest
and therefore, according to him, the field is governed by the
earlier judgment in case of Deepak Mahajan.
26 We have perused the said judgment and at the outset,
we must mention that at the time when the said judgment was
delivered, all the offences under the Customs Act 1962 were non-
cognizable and the issue before the Apex Court was since they are
non-cognizable, whether they are bailable. The issue was
answered in the affirmative and it was held that the non-obstante
clause contained in section 9A of the Excise Act made it clear that
notwithstanding anything contained in the Code of Criminal
6 (2011) 14 SCC 1
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
58/78 wp 3818-18 J.docProcedure, offences under Section 9 would be deemed to be non-
cognizable within the meaning of Code of Criminal Procedure.
In paragraph nos.41 and 42 of the report, the following
observations are relevant for the purpose of our discussion :
41 In our view, the definition of "non-cognizable
offence" in Section 2(l) of the Code makes it clear that
a non-cognizable offence is an offence for which a
police officer has no authority to arrest without
warrant. As we have also noticed hereinbefore, the
expression "cognizable offence" in Section 2(c) of the
Code means an offence for 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. 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. The same provision is contained in Section 41
of the Code which specifies when a police officer may
arrest without order from a Magistrate or without
warrant.42 Having considered the various provisions of
the Central Excise Act, 1944, and the Code of Criminal
Procedure, which have been made applicable to the
1944 Act, we are of the view that the offences under the
1944 Act cannot be equated with offences under the
Indian Penal Code which have been made non-
cognizable and non-bailable. In fact, in the Code itself
exceptions have been carved out in respect of serious
offences directed against the security of the country,
which though non-cognizable have been made non-
bailable.Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
59/78 wp 3818-18 J.docAs regards the Customs Act is concerned, the power of arrest
which was contained in Section 104 was referred to and sub-
section (4) which contain a non-obstante clause was the focus of
attention. As regards the provisions of Customs Act, it observed
thus :"66 The provisions of Section 104(3) of the
Customs Act, 1962, and Section 13 of the Central Excise
Act, 1944, vest Customs Officers and Excise Officers
with the same powers as that of a Police Officer in
charge of a Police Station, which include the power to
release on bail upon arrest in respect of offences
committed under the two enactments which are
uniformly non-cognizable. Both Section 9A of the 1944
Act and Section 104(4) of the Customs Act, 1962,
provide that notwithstanding anything in the Code of
Criminal Procedure, offences under both the Acts would
be non-cognizable.68 Accordingly, on the same reasoning, the
offences under the Customs Act, 1962 must also be held
to be bailable and the Writ Petitions must, therefore,
succeed. The same are, accordingly, allowed. Crl. M.P.
No.10673 of 2011 in WP (Crl.) No.76 of 2011 is also
disposed of accordingly. Consequently, as in the case of
offences under the Central Excise Act, 1944, it is held
that offences under Section 135 of the Customs Act,
1962, are bailable and if the person arrested offers bail,
he shall be released on bail in accordance with the
provisions of sub-Section (3) of Section 104 of the
Customs Act, 1962, if not wanted in connection with any
other offence.Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
60/78 wp 3818-18 J.doc27 The said judgment in our considered view clearly set
out the proposition of law which would intend to propound. An
argument was advanced by the learned ASG that the bailability or
non-bailability of an offence is not depending upon the offence
being cognizable or non-cognizable. He submitted that the
bailable offences are those which are made bailable in terms of
section 2(a) of Cr.P.C and which are defined as such under the
First Schedule and whether it is bailable or not, is to be
determined with reference to that Schedule. After dealing with
the said section, by making reference to the non-obstante clause
contained in sub-section (4) of section 104, it was held that the
offence under Section 135 of the Customs Act though non-
cognizable, they are bailable and this was particularly in light of
the wording of the said sub-section i.e. "notwithstanding anything
in the Cr.P.C." thereby conveying that though a non-cognizable
offence under the Code of Criminal Procedure under Schedule-I,
though punishable with imprisonment for more than three years,
it was held to be bailable.
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
61/78 wp 3818-18 J.docShri Nankani has invited our attention to the order of
the Apex Court passed in Review Petition assailing the decision in
Om Prakash (supra) and the dismissal of the Review Petition and
would submit that the Review Petition is dismissed and the
observations made in Om Prakash (supra) are thus affirmed.
28 Learned counsel appearing for the respective parties
have relied upon several judgments which lay down a proposition
supporting their submission. A judgment in case of Sunil Gupta
Vs Union of India 7
has been heavily relied upon by ShriManinder Singh which deal with the power of Central Excise
Ofifcer to arrest a person without a warrant where he has reason
to believe that he is liable to be punished under the Central
Excise Act, 1944. The Division Bench of the Punjab Haryana
High Court dismissed the writ petitions by turning down the
contention of the counsel for the petitioner that no arrest can be
made without a warrant. The said decision has been considered
by the Three Judges Bench in Om Prakash and in paragraph
no.31 Their Lordships have made reference to the said decision
7 1999 SCC Online PH 350Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
62/78 wp 3818-18 J.docwhere it has been held that FIR or complaint or warrant is not a
necessary pre-condition for an officer under the Act to exercise
the power of arrest. Further, in Om Prakash, the earlier decision
of the Apex Court in case of Deepak Mahajan (supra) has also
been taken note of along with the judgment relied upon by Shri
Maninder Singh, in Bhavin Impex Pvt.Ltd. Vs. State of
Gujarat 8.
29 Shri Nankani has placed reliance on a judgment of
the Punjab Haryana High Court in case of Gaurav Kathuria
Vs. Union of India 9 and which is affirmed by the Apex Court in
view of the dismissal of the Appeal before the Apex Court. The
said judgment of the Punjab Haryana High Court follow the
decision of the Apex Court in case of Deepak Mahajan as well as
Om Prakash Vs. Union of India (supra). The petitioner before
the High Court who was desirous of instituting criminal case
alleging duty evasion in import of heavy metal scrap and
according to whom the imports were made by mis-declaring the
8 2009 SCC Online Guj 9965
9 2017 (348) E.L.T. 24 (P H)Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
63/78 wp 3818-18 J.docrelevant price to evade duty and which would constitute offences
under Section 132 of the Customs Act, challenged the vires of the
provisions of the PMLA Act. The petitioner argued that he
intended to apply before the Judicial Magistrate for issuance of
directions to the Custom Officer for commencing the
investigation into the criminal offences and prosecuting the
accused for commission of the offences under the Customs Act.
However, according to him, he could not be permitted to set the
criminal law into motion by approaching the jurisdictional
Magistrate because the Customs Act as well as the PMLA are
considered to be complete Code and the provisions as Section
156(3) or Section 155(2) of the Code may not have an
application in the field occupying by the special statutes. The
exhaustive report deal with the provisions of both the enactments,
the existing law on the point, the Division Bench observed thus :
15.13 All the aforesaid judgments in the context of
Customs Act, 1962 or Central Excise Act, 1944 are in
respect of "non-cognizable"offences under these Acts.After the judgment in Om Prakash (supra) 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)Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
64/78 wp 3818-18 J.docwith effect from 28-5-2012, sub-sections (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 lakh rupees, shall be cognizable.
(5) Save as otherwise provided in sub-section (4),
all other offences under the Act shall be non-
cognizable.15.14 Therefore, the Customs Act now
prescribes 2 categories of offences, first being offences
falling under sub-section (4) which are 'cognizable' and
second being all offences other than those falling under
sub-section (4), which shall be non-cognizable in terms of
sub-section (5).15.15 Words 'cognizable' or 'non-cognizable'
offence 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 arrest
without warrant"15.16 By application of Section 4(2) of the Code
and in view of the aforesaid binding precedents, theTilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
65/78 wp 3818-18 J.docwords 'police officer' appearing in these definitions
would be read as 'officer' authorized under the Customs
Act, 1962. Thus, in a 'cognizable offence' under Customs
Act, 1962 the Customs Officer would have power to
arrest under Section 104(1) without a warrant. He would
comply with provisions of Sections 154 to 157 by
recording the information and 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 Prakash (supra).30 On carefully examining the principle enunciated by
the Apex Court, the position that emerge is to the effect that
though the Customs Act, 1962 classifies the offence punishable
thereunder as cognizable/non-cognizable, it do not lay down any
set of procedure for dealing with the information received by the
Custom Officer for proceeding under the provisions of the Act. It
also do not define the term "cognizable/non-cognizable" and in
absence of such a definition, the terms take the meaning assigned
in the Code of Criminal Procedure. In absence of any set of
procedure for commencing the so-called 'investigation' in words
of the learned senior counsel Shri Maninder Singh, though the
statute applies the phrase 'inquiry' for commencing conducting
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
66/78 wp 3818-18 J.docand culminating a valid investigation into the distinct classes of
offences, the position that would therefore emerge is to resort to
sub-section (2) of Section 4 in relation to an investigation into an
offence under the special statute and in absentia of any provision
setting out the modalities for commencing, conduct and
culmination of investigation. In absence of any overriding
provision in the Customs Act, stipulating any contrary procedure,
relating to an information received and the manner in which the
Custom Officer, who for limited purpose posses the power of a
police officer, by virtue of Section 4(2) of the Code, the respective
provisions in the Code relating to dealing with the information
requiring an inquiry/investigation into the offences classified as
cognizable/non-cognizable shall necessarily follow. The position
of law as could be discerned from the judgment in the case of
Deepak Mahajan (supra) by virtue of Section 4(2), the
provisions of Chapter XII of the Cr.P.C are made applicable to the
investigations by the Enforcement Directorate. What follows
from the judgment of the Apex Court in Deepak Mahajan is the
ratio that by combined operation of Section 4(2) and 26B of the
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
67/78 wp 3818-18 J.docCode, the offence complained of should be investigated or
inquired into or tried according to the provisions of the Code
when the Customs Act do not create a special procedure.
31 In Illias Vs. Commissioner of Customs (supra),
the Constitution Bench has held that the custom authorities have
been invested with many powers akin to that of a police officer in
matter relating to arrest, investigation and search which was not
there in the earlier Customs Act. Even though the custom
officers possess the said power, they do not become police officials
within the meaning of Section 25 of the Evidence Act and it was
held that the confessional statements made by the accused
persons to custom officers would be admissible in evidence
against them. The Constitution Bench recorded as under :
14 It was reiterated that the appellant could not
take advantage of the decision in Raja Ram Jaiswal's case
and that Barkat Ram's case was more apposite. The ratio of
the decision Badku Joti Savant is that even if an officer
under the special Act has been invested with most of the
powers which an officer- in-charge of a police station
exercises when investigating a cognizable offence he does not
thereby become a police officer within the meaning of s. 25
of the Evidence Act unless he is empowered to file a charge
sheet under s. 173 of the Code of Criminal Procedure.Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
68/78 wp 3818-18 J.doc15 In this view of the matter even though under the new
Act a customs officer has been invested with many powers
which were not to be found in the provisions of the old Act,
he cannot be regarded as a police officer within the meaning
of s. 25 of the Evidence Act. In two recent decisions of this
Court in which the judgments were delivered only on
October 18, 1968 i.e. Romesh Chandra Mehta v. State of
West Bengal(1) and Dady Adarji Fatakia v.K.K. Ganguly,
Asstt Collector of Customs Ant.,('2) the view expressed in
Barkat Ram's(3) case with reference to the old Act has been
reaffirmed on the question under consideration and it has
been held that under the new Act also the position remains
the same. This is what has been said in Dady Adarji
Fatakia's(2) case:"For reasons set out in the judgment in Cr. A.
27/67 (Romesh Chand Mehta v. State of West
Bengal) and the judgment of this Court in Badku
Joti Savant's(4) case, we are of the view that a
Customs Officer is under the Act of 1962 not a
police officer within the meaning of s. 25 of the
Evidence Act and the statements made before him
by a person who is arrested or against whom an
inquiry is made are not covered by s. 25 of the
Indian Evidence Act."The submission of the learned senior counsel
appearing for DRI to the effect that the entire provisions of
chapter XII of the Cr.P.C stand excluded on the premise of a
decision in case of Ramesh Chandra Mehta Vs. Union of
India 10. According to us, is not a correct reading of the said
10 AIR 1970 SC 940
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
69/78 wp 3818-18 J.docdecision. The Constitution Bench while rejecting the contention
that the power conferred on a custom officer to arrest on having a
reason to believe that he has been guilty of an offence under
Section 135, result into a formal accusation of an offence came to
be rejected by observing that Section 104(1) only prescribes the
conditions in which the power of arrest may be exercised and
arrest and detention are only for the purpose of holding
effectively an inquiry under Section 107 and 108 of the Act with
a view to adjudge the confiscation of dutiable or prohibited goods
and imposing penalties. The Constitution Bench observed thus :
"26.........Arrest and detention are only for the purpose of
holding effectively and inquiry under Section 107 and
108 of the Act with a view to adjudging confiscation of
dutiable or prohibited goods and impose the penalties.
At that stage, there is no question of offender against the
Customs Act being charged before a Magistrate.
Ordinarily, after adjudging the penalty and confiscation
of goods or without doing so, if the Custom Officer forms
an opinion that offender should be prosecuted, he may
prefer a complaint in the manner provided under
Section 137 with the sanction of Collector of Customs
and until a complaint is so filed, a person against whom
an inquiry is commenced under Customs Act, do not
stand in the character of a person accused of an offence
punishable under Section 135".Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
70/78 wp 3818-18 J.docThe observations cannot be read to exclude the
applicability of Chapter XII of Cr.P.C in entirety. The offences
under the Customs Act,till the amendment were only non-
cognizable and therefore, resort to Section 173 of Chapter XII
was clearly not permissible. The judgment in case of Deepak
Mahajan (supra) follows the judgment of the Constitution Bench
in regard to admissibility of statements in light of Section 20(3)
and Section 25 of the Evidence Act and was not applicable for
deciding the issue of applicability of the provisions of the Code in
light of Section 4(2) thereof. The contention of the petitioner is
not to the effect that in every non-cognizable offence, an FIR has
to be registered but according to the petitioner, the course to be
adopted would depend on whether the offence is cognizable/non-
cognizable, but it necessarily fall within the purview and ambit of
Chapter XII of Cr.P.C. The commencement point therefore lies
either Section 154 or 155 and in absence of following the said
path, the 'investigation' cannot be said to have been commenced
which would permit the authorities to take recourse to Section
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
71/78 wp 3818-18 J.doc166A contained in Chapter XII.
32 Turning back to Section 166A which opens with a
non-obstante clause "Notwithstanding anything contained in this
Code" are not the only guiding words of the said section but the
decisive words of the said section i.e. 'In the course of
investigation'. In order to appreciate the contention of Shri
Maninder Singh, it would be apposite to reproduce Section 166A
of Cr.P.C.
Section 166-A Letter of request competent authority for
investigation in a country or place outside India.(1) Notwithstanding anything contained in this
Code, if, in the course of an investigation into an offence,
an application is made by the investigating officer or any
officer superior in rank to the investigating officer that
evidence may be available in a country or place outside
India, any Criminal Court may issue letter of request to
a Court or an authority in that country or place
competent to deal with such request to examine orally
any person supposed to be acquainted with the facts and
circumstances of the case and to record his statement
made in the course of such examination and also to
require such person or any other person to produce any
document or thing which may be in his possession
pertaining to the case and to forward all the evidence so
taken or collected or the authenticated copies thereof or
the thing so collected to the Court issuing such letter.Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
72/78 wp 3818-18 J.doc(2) The letter of request shall be transmitted in
such manner as the Central Government may specify in
this behalf.(3) Every statement recorded or document or thing
received under Sub-Section (1) shall be deemed to be the
evidence collected during the course of investigation
under this Chapter.The said section came to be inserted by Act No.10 of 1990 and
the statements of objects and reasons of the said Amendment Act
inter alia states as under :-
"the investigating authorities in India were
handicapped in collecting evidence in a foreign country or
a place in respect of a crime committed by a citizen of
India outside the country, due to the absence of a specific
provision in the Code of Criminal Procedure, 1973"Pertinent to note that by virtue of Section 1(2) of the
Code of Criminal Procedure, the Code extends to the whole of
India and a difficulty was posed in permitting an evidence
collected outside India to be treated as an evidence collected
during the course of the investigation since it was extra territorial.
In order to do away with the practical difficulty, the said section
begins with a non-obstante clause to make the evidence collected
from any other country or place and brought before the Court
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
73/78 wp 3818-18 J.doctrying such an offence and the evidence is so taken or collected
shall be deemed to be the evidence collected during the course of
investigation under Chapter XII. Sub-section (3) of Section
166A therefore, introduces the deeming provision and the
evidence collected by issuing the Letter of Request to the
competent authority in a country or place outside India, is
accepted as an evidence collected during the course of
investigation. The non-obstante clause in the beginning of
Section 166A of the Code thus deviates from the golden thread
which runs through the entire Code i.e. only the evidence
collected by adopting the procedure prescribed under the Code
being admissible in evidence. The non-obstante clause, therefore,
in our considered view does not exclude/override all the
provisions of the Code and only such provisions of the Code
which are inconsistent with the application of Section 166A are
overriden. The said non-obstante clause cannot be construed in a
manner that it stands in deviation and derogation of all the
procedural safeguards contained in Chapter XII including the
mode and manner of commencing a valid investigation. The
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
74/78 wp 3818-18 J.docnon-obstante clause is a well known legislative device and in
olden times, it had the effect of non-obstante aliquo statuto in
contrarium (notwithstanding any statute to the contrary).
However, in the modern legislation, it has a contextual and
limited application. It is a settled position that the impact of the
non-obstante clause must be kept in measure by the legislative
policy and it has to be limited to the extent it is intended by
Parliament and not beyond that. Section 166A cannot be read in
isolation and it will have to be read as a part of Chapter XII of the
Code to be invoked and applied where the investigation is
commenced either under Section 154 or 155 in the manner
prescribed therein and it is necessarily an investigation under
Chapter XII, which in case of a cognizable offence, commenced
with lodging of an information with the police station officer and
the police officer following the procedure set out in Section 154
and in case of a non-cognizable offence, by obtaining an order of
the jurisdictional Magistrate in terms of sub-section (2) of Section
155, without obtaining such an order from the Magistrate under
Section 155((2). The valid investigation cannot be said to be
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
75/78 wp 3818-18 J.doccommenced and continued and therefore, recourse to section
166A without obtaining the necessary permission in respect of an
investigation of a non-cognizable offence cannot be justified. The
DRI has commenced the investigation into a non-cognizable
offence without obtaining the necessary permission from the
Magistrate and in such circumstances, the LR issued by the
Magistrate do not meet the test and is not compliant of Chapter
XII of the Cr.P.C. since it do not precede the mandatory
requirement of initiation of investigation, as prescribed in
Chapter XII. We are in agreement with the submission of Shri
Singh to the effect that Section 166A adopts a liberal procedure to
be followed to the effect that such an application can be made by
the Investigating Officer to "any criminal court" and it is then
imperative on the part of the said Court irrespective of the fact
that whether the offence was committed within its territorial
jurisdiction to issue a letter of Request to a Court or an authority
in another country or place competent to deal with such request
to examine orally any person supposed to be quantified with the
facts and circumstances of the case and to record his statement
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
76/78 wp 3818-18 J.docmade, in the course of such examination or to produce any
document or thing in his possession. The flexibility in the said
procedure as a purpose to serve and without being stuck in the
procedural rigmarole of jurisdictional Court, it is any criminal
court which can issue such a Letter of Request. However, this
provision, which according to Shri Singh is a special provision do
not exclude the applicability of the procedure contemplated
under Section 154/155 of the Code of Criminal Procedure. The
statutory safeguard contained in Section 155(2) of the Code has
been construed to be mandatory in nature since the said safeguard
are conceived in public interest and has a guarantee against
frivolous and vexatious investigation in case of Tilak Nagar
Industries Ltd vs. State of U.P Anr, 11 .
33 Pertinent to note that when we heard the matter on
19th September 2018, our attention was invited to the guidelines
issued by the Government of India, Ministry of Home Affairs,
Internal Security Division on 31st December 2007, relating to the
issue of Letter of Rogatory (LRs) for causing investigation abroad.
11 2011(15) SCC page 571Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
77/78 wp 3818-18 J.docThe said guidelines contemplate that in order to obtain proposal
from the Ministry of Home Affairs, the Investigating Agency is
expected to sent certain documents which include the brief facts
of the case, incorporating the allegations, name of the accused and
particulars of the offences committed and a copy of the FIR and it
is even the Ministry has understood and reflected when an
investigation is set in motion and it is only in the backdrop of
these circumstances, according to the guidelines, the Court may
issue a letter of Rogatory. We only express that even the Ministry
of Home Affairs has understood it in the way which we have
elaborated. We say nothing more on this.
34 In light of the legal position emerging from the
aforesaid discussion and the conclusions arrived by us, we make it
clear that we have not gone into the merits of the letter of
Rogatory issued by the Magistrate. We have only dealt with the
contention as to whether it was permissible for the Magistrate to
issue such a Letter of Rogatory without following the procedure
mandates by sub-section (2) of Section 155 and whether the letter
Tilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
78/78 wp 3818-18 J.docof Rogatory was issued on initiation of a valid investigation under
Chapter XII of Cr.P.C. Since we are of the express opinion that
Section 166A is not an independent island on which any
investigating/inquiring authority can jump on without taking
recourse to Section 154/155, we hold and declare that the action
of the respondents in giving effect ot the letter of Rogatory issued
by the learned Metropolitan Magistrate, Mumbai in relation to
the import of coal of Indonesian origin cannot be sustained and it
deserves to be quashed and set aside.
35 Writ Petition therefore stands allowed in terms of
prayer clauses (a) and (b).
SMT. BHARATI DANGRE, J RANJIT V. MORE,JTilak
::: Uploaded on - 17/10/2019 18/10/2019 05:27:47 :::
