Sudhir Kumar Dhingra vs Union Of India
1997 Latest Caselaw 881 Del

JUDGMENT

Manmohan Sarin, J.

(1) Petitioner is aggrieved by the order dated 17.5.1996, passed by the Additional Chief Metropolitan Magistrate, holding that the goods that had been seized as well as the Indian and foreign currency that had been ordered to be released by the Commissioner of Customs as well as by the Customs Excise and Gold (Control) Appellate Tribunal (in short CEGAT) is case property required during trial.

(2) Learned Additional Chief Metropolitan Magistrate, therefore, held that it would be premature, improper and unjust to release the said case property prior to the conclusion of the trial and at least before the conclusion of the evidence. The impugned order was passed on an application moved by the department seeking directions in view of the orders passed by the Commissioner of Customs as well as by the Cegat, declining stay of the order of the Commissioner of Customs.

(3) It may also he noticed that the petitioner had also filed a writ petition seeking similar relief. However, this Court disposed of the same, holding no orders were necessary in view of the before passed by the CEGAT.

(4) The facts giving rise to the present petition may briefly be noticed :

(I)There was a raid on the residential and business premises of the petitioner on 11.10.1991. Rs. 15 lacs in Indian currency and goods of foreign origin as Well as foreign currency. Bank drafts and cheques totalling approximately Us $ 29,740 were recovered. The petitioner preferred Writ Petition No. 3879/91, claiming that the amount of Rs. 15 lacs found in cash was to be deposited with the National Housing Bank under the voluntary deposits (Immunities and Exemption) Act, 1991. Under the scheme 60% of the amount deposited, could be withdrawn by the depositor and the remaining 40% of the amount remained with the National Housing Bank, which was not refundable. This Court disposed of the writ petition and directed the Customs Authorities to deposit Rs. 15 lacs with the National Housing Bank under the scheme. Customs Authorities were further permitted to withdraw 60% of the amount forthwith. The Court held that in case the petitioner succeeded and the seizure was invalid, the petitioner would be entitled to 60% of the amount withdrawn by the Customs Authorities. In case the petitioner failed and the seizure was held to be valid then the National Housing Bank would refund 40% of the amount to the Customs department.

(II)The Customs Authorities thereafter began the adjudication proceedings. The Commissioner of Customs passed a detailed order bearing No. 2/ MMS/95 dated 10.2.1995 by which it dropped the proceedings initiated against the petitioner. The five cheques, pay orders that were recovered from the brief case were ordered to be released to the petitioner for onward transmission to their respective owners. As regards the Indian currency amounting to Rs. 15 lacs, the 60%with the Customs Authorities was directed to be released to the petitioner, with Income Tax and other concerned authorities being suitably informed. All other goods seized from the residence of the petitioner were also ordered to be released,

(III)The department preferred an appeal against the said order. The Cegat vide its order dated 15.1.1996 rejected the prayer of the department for stay of the order insofar as the release of cheques, pay orders, foreign exchange and the Indian currency were concerned. However, as regards the goods seized from the residence of the petitioner, the Cegat held that the goods were miscellaneous in nature including camera, liquors. The Court while directing early hearing held that the goods seized and ordered to be released, may not be released and kept with the Customs department. There after, this Court on 23.2.1996 disposed of C. W. 3161/ 1995, filed by the petitioner seeking release of the seized goods on the basis of the order of the Commissioner dated 22.10.1995, holding that in view of the above order i.e. 15.1.1996, passed by the Cegat, no orders were necessary.

(5) Learned Counsel for the petitioner has argued that the present order passed by the learned Additional Chief Metropolitan Magistrate would amount to frustrating without any justification, the orders passed by the Commissioner of Customs as well as by the Cegat, declining the stay. Learned Counsel argued that this Court also in view of the orders passed by the Cegat disposed of C.W. 3161 /96. In these circumstances, the impugned order, passed by the learned Additional Chief Metropolitan Magistrate frustrated the reliefs granted to the petitioner by the Collector of Customs. It had the effect of staying the order of the Commissioner of Customs even though the same relief has been declined by the Cegat in appeal.

(6) Learned Counsel for the respondent submitted that the order passed by the learned Additional Chief Metropolitan Magistrate was within its jurisdiction specially since the penal proceedings under the Customs Act were different and independent to the adjudication proceedings. It is argued that the order passed by the learned Additional Chief Metropolitan Magistrate was within its jurisdiction as the currency was "case property" and could not be disbursed prior to the conclusion of the evidence and trial. The provisions covering disposal of case property before a Criminal Court are governed by Sections 451 and 452 of the Criminal Code Procedure. These sections deal with the order to be passed with regard to the interim custody or its disposal under Sections 451 and 452, Cr.P.C. In the instant case, a Competent Officer under the Customs Act has directed the release of the currency, that had been seized, part of which had been earlier deposited, under the order passed by this Court in C.W. 3687/91. Moreover, in my view the cash currency and goods in question were neither produced before the Magistrate nor were they in the custody of the Magistrate, which would have warranted an order under Section 452 of the Code of Criminal Procedure. Reference in this connection may be usefully made to the decision of the Apex Court in Remo Paul Altoe v. Union of India, reported as 1983 E.L.T. 1600 S.C. In the said case the Metropolitan Magistrate while convicting the appellant under Section 135 of the Customs Act sentenced him to pay a fine of Rs. 2,000.00 , in default to suffer imprisonment for six months. The Magistrate further ordered that the "goods involved in this case are confiscated to the State if not already confiscated". The High Court, in revision, affirmed the conviction but reduced the sentence to Rs. 500.00 . It also affirmed the order of confiscation of dollars. It was contended before the Apex Court that the Magistrate had no power to order confiscation of the currency and the High Court was in error in confirming the order. The Apex Court allowed the appeal and observed as under in para (6): "The Customs Act thus provides that contraband goods "shall be liable to confiscation" and also lays down a detailed procedure for the confiscation of such goods. The appellant contends that the special provisions of the Customs Act regarding the confiscation of goods seized under that Act make the general law as to disposal of property contained in Section 452(i) of the Cr.P.C. inapplicable in respect of such goods. According to the respondent Union of India, Customs Authorities and the Criminal Court have concurrent jurisdictions in the matter. However, we do not find it necessary to answer the question in this appeal which, in our opinion, should succeed on a short point. An order for the disposal of any property under Section 452(1) of the Criminal P.C. is necessary where the property remains to be disposed of by the Court after the inquiry or trial is over. In the present case it appears that the foreign currency seized from the appellant was not produced before the Magistrate and was not in the custody or control of the Court when the order of confiscation was made. There was thus no necessity or occasion for the Court to make an order for disposal of any property; the order of the Magistrate that the goods involved in the case are confiscated "if not already confiscated" clearly shoves that he was not aware what had happened to the goods which were in the control of the Customs Authorities. It is true that the foreign currency seized from the appellant's possession was property in respect of which an offence was committed, but this fact alone did not call for an order under Section 452(1) in the circumstances of the case, and the order passed, besides being unwarranted is likely to create complications if in respect of the foreign currency a proceeding under the Customs Act is pending or the Customs Authorities have made any order with which the Magistrate's order is inconsistent. We, therefore, allow the appeal and set aside the order of confiscation passed by the Magistrate and affirmed by the High Court".

(7) Moreover, learned Counsel for the petitioner has submitted before me that the petitioner undertakes not to object to or question, assail or challenge the proceedings before the learned Additional Chief Metropolitan Magistrate on the ground that the alleged case property viz. the Indian currency, foreign currency, cheques and pay orders were not available and had not been tendered in evidence. Learned Counsel for the petitioner submits that he is himself seeking the release of the said currency. Learned Counsel for the petitioner submits that petitioner does not dispute the factum of seizure or the recovery of the said amount of Rs. 15 lacs in Indian currency. I am of the view that the impugned order requiring retention of the Indian and foreign currency for trial as case property deserves to be modified in accordance with the directions given by the Cegat vide order dated 15.1.1996 in paras 8 and 9. Resultantly the goods seized from the residence, godown and shop of the petitioner shall be retained as case property, while all other items shall be released as set out in para 8 of the order dated 15.1.1996. The petitioner would therefore be entitled to release of 60% of the Indian currency seized and lying with the Customs department.