Eskay Electronics (I) Pvt. Ltd & ... vs P K Khera, Superintendent, ...
2009 Latest Caselaw 3692 Del

*             THE HIGH COURT OF DELHI AT NEW DELHI

%                         Judgment Reserved on: 28.08.2009
                          Judgment delivered on: 11.09.2009

                        Crl. M.C. 1832/2008


ESKAY ELECTRONICS (I) PVT.
LTD & ORS.                                     ..... Petitioners

                                  Vs

P.K. KHERA, SUPERINTENDENT,
CENTRAL EXCISE, PREVENTIVE, DELHI              ..... Respondent

Crl. M.C. 364/2007

CENTRAL EXCISE ..... Petitioner

Vs

ESKAY ELECTRONICS (I) PVT.

LTD & ORS.                                     ..... Respondents


Advocates who appeared in this case:

For the Petitioner       : Mr Dinesh Mathur, Sr. Advocate with Mr D.K.
                           Mathur, Advocate in Crl. M.C. 1832/2008.
                           Mr Satish Aggarwal, Advocate in Crl. M.C.
                           364/2007.
For the Respondent       : Mr Satish Aggarwal, Advocate in Crl. M.C.
                           1832/2008
                           Mr Dinesh Mathur, Sr. Advocate with Mr D.K.
                           Mathur, Advocate in Crl. M.C. 364/2007.


CORAM :-
HON'BLE MR JUSTICE RAJIV SHAKDHER

1.     Whether the Reporters of local papers may
       be allowed to see the judgment ?               Yes
2.     To be referred to Reporters or not ?           Yes
3.     Whether the judgment should be reported
       in the Digest ?                                Yes

RAJIV SHAKDHER, J

1. The captioned petitions, which are filed under Section 482 of

the Code of Criminal Procedure, 1973 (hereinafter referred to in

short the „Cr.P.C.‟), can be disposed of by a common judgment in

view of the fact that they arise out of the same set of circumstances.

2. Crl. M.C. No. 364/2007, which is preferred by the Central

Excise Collectorate, New Delhi (hereinafter referred to as the

„Department‟), is directed against the order dated 09.10.2006

passed by the learned Addl. Chief Metropolitan Magistrate, New

Delhi (in short the „ACMM‟), whereby he has closed the pre-charge

evidence being led by the department. On the other hand, the Crl.

M.C. No. 1832/2008, which has been preferred by the Eskay

Electronics (I) Pvt. Ltd., its Managing Director, Mr M.S. Kathuria

and its Production Manager, Mr. N.P. Kathuria (hereinafter

individually referred to as „accused no.1‟, „accused no. 2‟ and

„accused no. 3‟ respectively and collectively referred as „accused‟),

have preferred the petition primarily on the ground of violation of

their fundamental right under Article 21 of the Constitution of

India, which mandates a speedy trial. It is the contention of the

accused that they were summoned by the trial court on 04.09.1989

for violation of the provisions of Section 9 and 9A of the Central

Excise & Salt Act, 1944 (hereinafter referred to as the „CE Act‟),

and till date, the prosecution has not even completed the pre-

charge evidence.

3. In the aforesaid circumstances, I have decided to deal with

the petition filed by the accused, in the first instance, as the

decision in it shall impact the petition of the department.

3.1 In respect of these petitions, the following facts may be

noticed:

3.2 The accused no. 1 is a private limited company, while accused

no. 2 is its Managing Director. Accused no. 3 is the Production

Manager of accused no. 1 and the son of accused no. 2.

3.3 It transpires that on 23.01.1987, the officers of the A.B.

Branch of the department visited the factory premises of the

accused no. 1. Raids were conducted by the department, both at

the business premises as well as at the residential premises of the

accused no. 2. In addition, raids were also made at the residential

premises of the nominee directors. The result of the raids was that,

the department, having resumed several documents, books and

statutory record; it formed an opinion that the accused were

involved in clandestine removal of TV sets on a large scale; without

paying the requisite excise duty. Resultantly, a complaint was filed

in the court of ACMM, Delhi. In the complaint, the department

made allegations against the accused under the following broad

heads:

(i) Failure to account for picture tubes shown in the raw material

account register, i.e., Form-IV register;

(ii) Clearances made on the strength of forged invoices in

connivance with one of its dealers Espe Industries;

(iii) Clearance on the basis of forged gate pass;

(iv) A comparison of original gate pass, which accompanied the

transportation of goods with the second copy of the gate pass, kept

for assessment by the department, and the copy kept in the office of

accused no. 1 revealed that the goods were being cleared far in

excess of the quantity shown in the original gate pass, when

compared with the second and third copy of the gate pass.

(v) Clearance made using two sets of invoices bearing the same

serial number;

(vi) Clearances being made on the strength of forged challan as

well as kuchha slips, in respect of which, allegedly no excise duty

was paid;

(vii) Anomaly between the figures with regard to production of TV

sets and those received for the purposes of repair; and

(viii) Lastly, under-valuation of goods on which duty was payable at

the relevant time on ad volerum basis.

4. Alongwith the complaint, the department had appended a list

of witnesses. The said list of witnesses detailed out names of

twenty four (24) persons. The learned ACMM by an order dated

03.02.1989 took cognizance of the complaint, filed by the

department, under Section 9 and 9A of the CE Act read with

Section 193, 192 and 120 of the Indian Penal Code, 1860

(hereinafter referred to as the „IPC‟). After taking cognizance, the

learned ACMM registered the complaint, and summoned the

accused.

5. Mr Dinesh Mathur, learned Senior Counsel, appearing for the

accused, instructed by Mr D.K. Mathur, Advocate submitted that

pursuant to orders of the learned ACMM, passed way back on

03.02.1989, the accused have appeared before the learned ACMM,

even so, the prosecution by the department has not proceeded

beyond the pre-charge stage. In order to buttress his submission,

he has placed reliance on the orders passed by the ACMM from

time to time. It is contended by the learned senior counsel that the

accused cannot be held responsible for the tardy conduct of

prosecution by the department. The learned senior counsel has

submitted that accused no. 2 is today, approximately 86 years of

age, while the accused no. 3 is nearly 48 years of age. He submits

that it is unlikely that the present case will reach culmination in

their life time. He has submitted that the callous manner in which

the department has prosecuted the present case has resulted in the

infringement of the right of the accused to a speedy trial as

encapsulated under Article 21 of the Constitution of India. In

support of his submission, the learned senior counsel placed

reliance on the following judgments:

Vakil Prasad Singh vs State of Bihar 2009 (3) SCC 355, J. Joseph vs Shri A.P. Nandy 1999 (2) JCC (Del.) 439, Pardeep Goyal vs The Enforcement Directorate 2007 (4) JCC 3033

6. As against this, Mr Satish Aggarwal, Advocate who appeared

for the department has opposed the relief sought for by the accused

in the present petition. He has contended before me that while

there has been some delay, on the part of the department in

conducting its case before the learned ACMM, the blame for at

least a part of the delay, is attributable to the accused. The learned

counsel further submitted before me, that this Court while

examining the merits of the petition filed by the accused for

quashing criminal proceedings on the ground of delay would bear in

mind, the other factors, such as the seriousness of the offence and

the revenue involved. He submitted that the accused had by their

illegal actions deprived the State of excise duty amounting to nearly

Rs 65 lacs. The learned counsel contended that they would be

willing to abide by any order of the court with regard to setting

down a time frame within which the trial be completed, in

compliance of which, they would diligently prosecute their case

before the learned ACMM. In support of his submission, learned

counsel for the department relied upon two judgments of the

Supreme Court, that is, State of Maharashtra vs Champalal

Punjaji Shah (1981) 3 SCC 610 and State of Bihar vs Baidnath

Prasad alias Baidyanath Shah & Anr. (2002) 1 SCC 465.

7. I have heard Mr Dinesh Mathur, learned senior counsel,

instructed by Mr D.K. Mathur, Advocate for the accused as well as

Mr Satish Aggarwal, learned counsel for the department. I am of

the view that the petition filed by the accused deserves to be

allowed and the proceedings be quashed. The reasons for coming

to this conclusion are as follows:

8. The accused were summoned by virtue of the learned

ACMM‟s order dated 03.02.1989. The summons were made

returnable on 04.05.1989. After 04.05.1989, it appears on a

perusal of the order sheet, that for the first time, the first

prosecution witness was partially examined, was on 30.10.1991.

His examination got completed on 19.05.2001. In the interregnum

on 30.04.1999, second prosecution witness was partly examined.

From the order sheet, it is not clear as to whether the examination

of second prosecution witness was at all completed. What is,

however, brought out, upon perusal of the order sheet, that on

17.07.2003, examination-in-chief of PW3 was carried out. The

examination-in-chief was finally completed on 09.10.2006, when the

impugned order was passed. This apart, there have been

adjournments, on at least 13 occasions, on the ground that the

prosecution witnesses are not available. These dates are

16.12.1996, 14.01.1998, 28.08.1998, 29.04.1999, 11.10.1999,

12.01.2000, 05.04.2000, 13.07.2000, 13.11.2000, 20.05.2002,

03.09.2002, 04.03.2004 and 13.12.2004. In addition to this reason,

the matter has also been adjourned on the ground of change of

counsel by the department, the records being bulky and also that

the original documents were put in a box, whose lock could not be

opened as the keys were lost. A reading of the order sheet from

1989 to 2006, leaves no doubt in my mind that the department has

displayed no seriousness in prosecuting the case.

9. The learned Sr. Counsel for the accused has rightly referred

to the provisions of Section 244 of the Cr.P.C. The trial court was

required to issue summons to the accused based on an application

moved by the department in that regard. The learned counsel for

the petitioner drew my attention to ground „D‟ of the petition filed

by the accused, wherein this has been specifically taken as a

ground in the petition. On perusal of the reply to the petition, I find

that the department has not contraverted this position. However,

Mr Satish Aggarwal, learned counsel, appearing for the department

had drawn my attention to the list of witnesses supplied along with

the complaint. He submitted that it was for the court to issue

summons; if the witnesses do not appear, the department could not

be held responsible. In my view, the submission of the learned

senior counsel for the petitioners/accused on this aspect has to be

accepted. The list of witnesses, filed with the complaint, will not

supplant the obligation placed on the complainant to move an

application in accordance with Section 244 of the Cr.P.C. before the

trial court for summoning the witnesses. It often happens that

while filing a complaint several witnesses are cited. During the

course of trial it is not considered necessary to summon all the

witnesses. Therefore, it is obligatory on the part of the complainant

to move a proper application, in respect of witnesses, it is desirous

of summoning. The department cannot shirk its responsibility by

placing burden on the trial court.

10. I may also point out at this stage that, on ascertaining from

the learned senior counsel for the petitioners/accused, as to

whether there was any adjudication order passed by the

department in respect of its allegation with regard to evasion of

excise duty, I was informed that upon a show-cause notice being

issued on 29.06.1988, the Principal Collector vide its order dated

28.04.1989 confirmed the entire demand of duty raised in the show-

cause notice, and also imposed a penalty of Rs 20 lacs.

Furthermore, in appeal, the Central Excise and Gold Appellate

Tribunal (in short the „Tribunal‟) vide order dated 24.09.1991

remanded the matter to the adjudicating authority for a re-

adjudication. While the matter was pending before the adjudicating

authority, an application was moved by the petitioners/accused

before the Settlement Commission, Customs and Excise, Principal

Bench. Before the Settlement Commission, the petitioners/accused

had admitted a duty liability of Rs 8,55,650/- against total duty

demand of Rs 65,83,506/- apart from a demand of Rs 11,000/- on

seized TV sets. The learned senior counsel placed the final order of

the Settlement Commission dated 28.12.2007 before me, whereby

the following directions were issued:-

"Central Excise Duty: The Duty liability of the applicant in this case is settled at Rs 45,43,550/-. Amount of Rs 9,47,090/- already stands deposited. Applicant is directed to deposit balance amount of Rs 35,96,460/- within 15 days of receipt of this order and send intimation to Revenue and the Bench after which the same shall also stand appropriated towards the additional duty liability.

Interest: The SCN does not seek to levy and interest and the applicant has also not made any prayer for immunity from the same. Hence no order need to be passed on this issue.

Penalty: In view of the facts and circumstances as mentioned in para 12 above, the Bench is not inclined to give to applicant full immunity from penalty. Bench imposes a penalty of Rs 1 lakh on the applicant under the provisions quoted in the SCN and grants immunity to the applicant from penalty in excess of the amount of Rs 1,00,000/-.

Fine: Subject to deposit of duty and penalty as recorded above, Bench grants immunity from fine in lieu of confiscation and the seized goods shall be released to the applicant.

Prosecution: Since the proceedings for prosecution have already been initiated before the date of the receipt of settlement application of the applicant, immunity from prosecution is not granted in terms of Proviso to sub-Section (1) 32 K of the Act.

10.1 The learned senior counsel for the petitioners/accused further

submitted that the order of the Settlement Commission is subject

matter of a challenge in Writ Petition No. 1257/2008, preferred by

the petitioners/accused, which is pending adjudication before a

Division Bench of this Court. He, therefore, submitted that in terms

of the order of the Settlement Commission, the duty liability has

been reduced from Rs 65,83,506/- to Rs 45,43,550 out of which the

petitioners/accused having already deposited Rs 9,47,090/-; they

are, as per the order of the Settlement Commission, required to pay

Rs 35,96,460/- along with Rs 1,00,000/- towards penalty. He

further submitted that, therefore, the contention of the learned

counsel for the department that dues outstanding are, in excess of

Rs 65 lacs, is not correct.

11. In this background, let me examine the judgments cited

before me both by, the learned senior counsel for the petitioners as

well as the learned counsel for the department.

11.1 But first the judgments cited by the petitioners:

11.2 In Pardeep Goyal (supra), the complaint was filed on

21.02.1986. The cognizance of the complaint was taken on the

same day. Accused were summoned to appear in court on

23.04.1986. For one reason or the other the matter was adjourned.

In the year 2007 when the mater came up before this Court, it was

still languishing at the pre-charge stage. Twenty one (21) years had

passed. This Court analyzed various judgments passed by the Apex

Court in which criminal proceedings had been quashed in the given

facts and circumstances of the case where delays were ranging

from 6 years to 26 years.

11.3 In J. Joseph (supra), once again, a single Judge of this Court

quashed the proceedings where a matter had languished in trial

court at the stage of pre-charge offence for a period of nearly 12

years. The proceedings were initiated against the accused in the

said case under Section 56 of the Foreign Exchange Regulation Act,

1973. These proceedings were initiated on 26.06.1986, and after

nearly a decade, the first witness produced by the prosecution was

still under cross-examination. This Court, based on the principle,

enunciated in Raj Deo Sharma vs State of Bihar 1998 (7) SCC

507, quashed the criminal proceedings. The observations made in

Raj Deo Sharma (supra) in para 8 & 9 of the judgment being

relevant are extracted hereinbelow:

"8. The entitlement of the accused to speedy trial has been repeatedly emphasised by this Court. Through it is not enumerated as a fundamental right in the Constitution, this Court has recognized the same to be implicit in the spectrum of Article 21. In Hussainara Khatoon v. Home Secretary, State of Bihar, (1980) 1 SCC 81, the Court while dealing with the cases of undertrials who had suffered long incarceration held that a procedure which keeps such large number of people behind bars without trial so long cannot possibly be regarded as reasonable, just or fair so as to be in conformity with the requirement of Article 21, The Court laid stress upon the need for enactment of a law to ensure reasonable, just and fair procedure which has creative connotation after Maneka Gandhi's case (1978) 1 SCC 248 in the matter of criminal trials.

9. In Hussainara Khatoon and Ors., (IV) v. Home Secretary State of Bihar, (1980) 1 SCC 98 this Court held that financial constraints and priorities in expenditure would not enable the Government to avoid its duty to ensure speedy trial to the accused."

11.4 The third case Vakil Prasad Singh (supra) cited by the

petitioner relates to a complaint filed alleging commission of

offences under Section 161 (before its omission by Act 30/2001),

109 and 120B of the IPC and Section 5(2) of the Prevention of

Corruption Act, 1947. The Supreme Court was hearing an appeal

against the judgment of the High Court whereby, the application of

the accused under Section 482 of the Cr.P.C. was dismissed by the

High Court, while acknowledging the fact that there had been a

delay in conclusion of proceedings against accused, and that some

prejudice would have been caused to the accused in his

professional career on account of continuation of criminal case

against him. Even so the High Court had dismissed the petition.

The Supreme Court reversed the judgment of the High Court, while

doing so noticed the following brief facts: In a complaint against

the accused that he had demanded illegal gratification, a trap was

laid. After investigation, a chargesheet was filed against the

accused on 28.02.1982. Cognizance in the case was taken on

09.12.1982; thereafter the prosecution took no substantial steps in

the matter. On 07.12.1990, a petition was filed by the accused

under Section 482 of the Cr.P.C. before the Patna High Court

challenging the order of the Special Judge taking cognizance of the

offences against the accused, on the ground that the inspector of

police, who had conducted the investigation on the basis of which

chargesheet had been filed, had no jurisdiction to do so. The High

Court quashed the order of the Magistrate taking cognizance, with

a direction to the prosecution to complete investigation within a

period of three months from receipt of the order, by an officer of

the rank of Dy. Superintendent of Police, or any other officer duly

authorized in that behalf. No progress in the case was made till

1998. The accused was forced to file another petition under

Section 482 of the Cr.P.C. seeking to quash the entire criminal

proceedings on account of delay. This petition was admitted by the

High Court on 20.11.1998. The petition came up for hearing before

Court on 11.05.2007, when in an affidavit, filed on behalf of the

prosecution, it was disclosed that the Superintendent of Police,

Muzaffarpur vide letter dated 27.02.2007 had directed the Dy.

Superintendent of Police to complete investigation. Investigation

was started on 28.02.2007 and a fresh chargesheet was filed on

01.05.2007.

11.5 The point, to be noted here is that, what is often trotted as

contributory delay on the part of the accused, which is really in one

sense taking recourse to a remedy available in law, did not find

favour with the Supreme Court. Taking recourse to a legal remedy

by the accused was not countenanced as delay attributable to the

accused. As a matter of fact, a specific submission with respect to

the delay being attributable to the accused was raised by the

prosecution in the said case, which is noticed by the Court in

paragraph 8 at page 263. The Supreme Court after noticing the

principles laid down by it in the various judgments passed by it

including its judgment in the case of Abdul Rehman Antulay &

Ors. vs R.S. Nayak & Anr. (1992) 1 SCC 225, at pages 363 and

364 in paragraphs 24 to 30 observed as follows:-

"24. It is, therefore, well settled that the right to speedy trial in all criminal persecutions (sic prosecutions) is an inalienable right under Article 21 of the Constitution. This right is applicable not only to the actual proceedings in court but also includes within its sweep the preceding police investigations as well. The right to speedy trial extends equally to all criminal prosecutions and is not confined to any particular category of cases. In every case, where the right to speedy trial is alleged to have been infringed, the court has to perform the balancing act upon taking into consideration all the attendant circumstances, enumerated above, and

determine in each case whether the right to speedy trial has been denied in a given case.

25. Where the court comes to the conclusion that the right to speedy trial of an accused has been infringed, the charges or the conviction, as the case may be, may be quashed unless the court feels that having regard to the nature of offence and other relevant circumstances, quashing of proceedings may not be in the interest of justice. In such a situation, it is open to the court to make an appropriate order as it may deem just and equitable including fixation of time frame for conclusion of trial.

26. Tested on the touchstone of the broad principles enumerated above, we are convinced that in the present case the appellant's constitutional right recognised under Article 21 of the Constitution stands violated.

27. It is manifest from the facts narrated above that in the first instance investigations were conducted by an officer, who had no jurisdiction to do so and the appellant cannot be accused of delaying the trial merely because he successfully exercised his right to challenge an illegal investigation. Be that as it may, admittedly the High Court vide its order dated 7-9-1990 had directed the prosecution to complete the investigation within a period of three months from the date of the said order but nothing happened till 27-2-2007 when, after receipt of notice in the second petition preferred by the appellant complaining about delay in investigation, the Superintendent of Police, Muzaffarpur directed the Deputy Superintendent of Police to complete the investigation. It was only thereafter that a fresh chargesheet is stated to have been filed on 1-5-2007.

28. It is also pertinent to note that even till date, learned Counsel for the State is not sure whether a sanction for prosecuting the appellant is required and if so, whether it has been granted or not.

29. We have no hesitation in holding that at least for the period from 7-12-990 till 28-2-2007 there is no explanation whatsoever for the delay in investigation. Even the direction issued by the High Court seems to have had no effect on the prosecution and they slept

over the matter for almost seventeen years. Nothing could be pointed out by the State, far from being established to show that the delay in investigation or trial was in any way attributable to the appellant. The prosecution has failed to show any exceptional circumstance which could possibly be taken into consideration for condoning a callous and inordinate delay of more than two decades in investigations and the trial. The said delay cannot, in any way, be said to be arising from any default on the part of the appellant.

30. Thus, on facts in hand, in our opinion, the stated delay clearly violates the constitutional guarantee of a speedy investigation and trial under Article 21 of the Constitution. We feel that under these circumstances, further continuance of criminal proceedings, pending against the appellant in the court of the Special Judge, Muzaffarpur, is unwarranted and despite the fact that allegations against him are quite serious, they deserve to be quashed."

11.6 The two judgments of the Supreme Court cited by the

department, i.e., Champalal Punjaji (supra) and Baidnath

Prasad (supra) expound no different principles from the ones

referred to hereinabove. As a matter of fact in both judgments,

there is reference to decisions of the Supreme Court which are also

referred to in its judgment in Vakil Prasad Singh (supra). What

is required to be noted is, in the Champalal Punjaji (supra) the

Supreme Court was hearing an appeal against an order of acquittal

passed by the High Court. The Supreme Court in the last

paragraph of its judgment at page 616 in paragraph 6 rejected

the plea of the learned counsel for the accused to dismiss the

appeal of the State, on the ground of delay, broadly; for the

following reasons: First, the accused himself was responsible for a

fair part of delay. Second, the accused was not able to show how

delay had prejudiced him in the conduct of defence. This case,

according to me, is distinguishable on facts.

11.7 The second case, i.e., Baidnath Prasad (supra) is also

distinguishable on facts as the Supreme Court categorically noted

that the trial in the case could not commence for a substantial

period on account of absence of one or other accused. (See page

468 paragraph 6 of Baidnath Prasad (supra)). The Court was

also cognizant of the fact that the offence with which the accused

had been charged was of a serious nature.

12. In the present case, the accused have been appearing in the

case since the date when summons were first made returnable on

04.05.1989. The delay in the instant case is purely on account of

callous attitude on the part of the prosecution. It may also be noted

that in so far as the aspect of revenue loss is concerned, the same is

subject matter of the proceedings before a Division Bench of this

Court. The delay in the instant case has clearly deprived the

accused of their fundamental right to speedy trial under Article 21

of the Constitution of India. The accused no. 2, as noted

hereinabove, is 86 years of age. Accused no. 3 is 48 years of age.

The matter is at the pre-charge stage. In view of the long delay, it

is quite obvious that the prosecution will find it quite hard, if not

impossible, to secure conviction, given the long gap of time since

the prosecution first commenced.

13. In these circumstances, I am of the opinion that the proceedings

pending in the court of learned ACMM, Delhi entitled Sh. P.K. Khera,

Superintendent, Central Excise, Prevention, Delhi vs Eskay

Electronics (I) Pvt. Ltd. be quashed. It is ordered accordingly. The

writ petition is allowed. The bail bond furnished by the accused stand

cancelled and the security is discharged.

14. In view of my order quashing the proceedings in Crl. M.C.

1832/2008, the department‟s petition being Crl. M.C. No. 364/2007

has been rendered infructuous. It is accordingly disposed of.

RAJIV SHAKDHER, J SEPTEMBER 11, 2009 kk