M/S Seiko Brushware (India) & Ors. vs Directorate Of Revenue ...
2009 Latest Caselaw 2632 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

+      Crl.M.C. 2637-40/2005


%                              Date of reserve: 06.07.2009
                               Date of decision: 15.07.2009


       M/S SEIKO BRUSHWARE (INDIA) & ORS.       ...PETITIONERS
                      Through:  Mr. Aakash Aggarwal, adv.



                                 Versus


       DIRECTORATE OF REVENUE INTELLIGENCE & ANR.
                                                 ...RESPONDENTS
                    Through:    Mr. Satish Aggarwal, adv.


     CORAM:
     HON'BLE MR. JUSTICE MOOL CHAND GARG

1. Whether the Reporters of local papers may be allowed to
   see the judgment?                                               YES

2. To be referred to Reporter or not?                              YES

3. Whether the judgment should be reported in the Digest?          YES


:      MOOL CHAND GARG, J.

1. In this matter, the controversy raised on behalf of the petitioner

is that on the basis of a departmental adjudication holding that the

petitioner was guilty of committing offences under the Customs Act,

the petitioner was not only proceeded departmentally but a complaint

was also filed on behalf of the second respondent under Section 132

and 135 of the Customs Act, 1962 and thereafter on the same day, Ld.

ACMM, Patiala House, New Delhi, issued summons to the peititioner

herein.

2. Subsequent to the original adjudication by the Enforcement

Directorate, the petitioner filed a first appeal which was dismissed.

However, in the second appeal filed by him before CESTAT, the

petitioner was completely exonerated vide order dated 22.02.2005 of

the offences alleged to have been committed in the original

departmental adjudication.

3. In this manner, the basis on which the complaint has been filed

by the second respondent stood nullified and therefore, in such kind of

matters continuing criminal complaint is not justified. The said

complaint is pending in the Court of ld. ACMM, Patiala House, New

Delhi, institued by the second respondent and therefore is liable to be

quashed in exercise of the powers vested in this Court under Section

482 Cr.P.C.

4. The petitioner has relied upon the following judgments:

1) Arjun Amla Vs. Enforcement Directorate, Crl.Rev.P.246/2007, decided on 13.03.2009

2) Ajay Gulati Vs. UOI, Crl.M.C.1108 & 1109 of 2007, decided on 03.04.2008

3) Anil Mahajan Vs. UOI, Crl.Rev.P.160/2007, decided on ` 05.02.2008

4) M/s Medisphere Marketing Ltd. Vs. Inspector Custom Preventive, Crl.M.C.541/2004, decided on 24.01.2008

5) M/s Bihariji Mfg. Co. (P) Ltd. Vs. CCE, Crl.M.C.938/2005 decided on 14.02.2007

6) Sunil Gulati Vs. R.K. Vohra, Crl.M.C.2173/2004 decided on 20.12.2006

7) R.K. Goenka Vs. Collector of Customs, Crl.M.C.1132/2002 decided on 02.09.2009.

5. On behalf of the respondents, the only submission made by the

learned counsel is that they have challenged the order passed in

appeal before the Supreme Court by filing SLP which is still pending

disposal and, therefore, the orders may not be passed for quashing of

the complaint as it may create anomaly inasmuch as in case the

second respondent succeeds before the Apex Court, it would become

difficult to revive the complaint and to trace the petitioners and it may

also lead to other complications.

6. Insofar as the law with regard to quashing of a complaint in such

kind of situation, this Court has consistently held that once

departmental adjudication exonerates the accused of the offences

which are the basis of lodging a complaint against the

accused/petitioners before a criminal Court under Section 135 Customs

Act such complaints though could have been filed in view of the

judgment delivered in the case of Standard Chartered Bank Vs. Andhra

Bank Financial Survives Ltd., 2006 (6) SCC 1994; the complaint cannot

be permitted to be tried further because once the department has no

legs to stand with respect to the original cause of action, continuing

criminal proceedings and prosecuting the accused in such like matters

tantamounts to abuse of the process of Court and therefore such

proceedings must come to an end. In this regard reference can be

made to a judgment delivered by a learned Single Judge of this Court

in the case of Sunil Gulati Vs. R.K. Vohra and others 2007 1 JCC 220.

where it has been held:

"On the same violation alleged against a person, if adjudication proceedings as well as criminal proceedings are permissible, both can be initiated simultaneously. For initiating criminal proceedings, one does not have to wait for the outcome of the proceedings are independent in nature.

The findings in the departmental proceedings would not, amount to re-judicata and initiation of criminal proceedings in these circumstances can be treated as double jeopardy as they are not in the nature of "prosecution".

In case adjudication proceedings are decided against a person who is facing prosecution as well and the Tribunal has also upheld the findings of the adjudicators/assessing authority, that would have no bearing on the criminal proceedins and the criminal proceedings are to be determined on its own merits in accordance with law, uninhibited by the findings of the

Tribunal. It is because of the reason that insofar as criminal action is concerned, it has to be proved as per the strict standards fixed for criminal case before the criminal court by producing necessary evidence.

In case of converse situation namely where the accused persons are exonerated by the competent authorities/Tribunal in adjudication proceedings, one will have to see the reasons for such exoneration to determine whether these criminal proceedings could still continue. If the exoneration in department adjudication is on technical ground or by giving benefit of doubt and not on merits or the adjudication proceedings were on different facts, it would have no bearing on criminal proceedings. If, on the other hand, the exoneration in the adjudication proceedings is on merits and it is found that allegations are not substantiated at all and the concerned person(s) is/are innocent, and the criminal prosecution is also on the same set of facts and circumstances, the criminal prosecution cannot be allowed to continue.

The reason is obvious criminal complaint is filed by the departmental authorities alleging violation/contravention of the provision of the Act on the part of the accused persons. However, if the departmental authorities, themselves, in adjudication proceedings, record a categorical and unambiguous finding that there is no such contravention of the provisions of the Act, it would be unjust for such department authorities to continue with the criminal complaint and say that there is sufficient evidence to foist the accused persons with criminal liability when it is stated in the departmental proceedings that ex facie there is no such violation. The yardstick would, therefore, be to see as to whether charges in the departmental proceedings as well as criminal complaint are identical and the exoneration of the concerned persons in the departmental proceedings is on merits holding that there is no contravention of the provisions of the any Act."

7. This Court also took a similar view in the case of M/s. The Printer

House Pvt. Ltd. Vs. Nishi Singh, 2009 (2) JCC 1279, wherein it has been

held:

"In view of the aforesaid once a departmental adjudication exonerates the petitioners on merits and there is a finding that there was no evasion of tax the question of culpable state of mind cannot be presumed and for that reason even the complaint filed by the petitioner which is based upon their original assumption would not survive."

8. In these circumstances even though the petitioner is entitled for

quashing, but since the second respondent has approached the

Supreme Court and the SLP filed by them is still pending, the matter is

adjourned sine die awaiting further orders by the Apex Court with

liberty to the parties to revive the present petition, if required.

Crl.M.A.5522/2009

The order dated 05.05.2009 is recalled to the extent of vacation

of interim orders and the interim order granting stay of proceedings

before the Trial Court are made absolute.

The application is disposed of.

MOOL CHAND GARG, J.

JULY 15, 2009 anb