Rajeev Bakshi vs D.R.I
2012 Latest Caselaw 1277 Del

*               THE HIGH COURT OF DELHI AT NEW DELHI
                                                   Date of Decision: 24.02.2012
+       CRL.M.C. 2638/2008
        RAJEEV BAKSHI                                       ..... Petitioner
                         Through:          Nemo.
                   Versus

        D.R.I                                             ..... Respondent
                                Through:   Mr.Satish Aggarwala, Advocate.
And
        CRL.M.C. 3393/2008
        N.J.KOTAK & ANR                                      ..... Petitioner
                         Through:          Mr.Siddharth Luthra, Sr. Advocate
                                           with Mr.Shri Singh, Advocate.
                        Versus

        DIRECTORATE OF REVENUE
        INTELLIGENCE                           ..... Respondent
                      Through: Mr.Satish Aggarwala, Advocate.
And
        CRL.M.C. 106/2009
        SUNIL KUMAR GUPTA                                   ..... Petitioner
                         Through:          Mr.Rajat Bali, Adv.

                        Versus

        DIRECTORATE OF REVENUE
        INTELLGENCE                          ..... Respondent
                      Through: Mr.Satish Aggarwala, Advocate.

CORAM:
HON'BLE MR. JUSTICE M.L. MEHTA

M.L. MEHTA, J.

1. Vide this common order Crl. M.C. No. 2638 /08, 106/09 and 3393/08 being connected matters, are being disposed of. The petitions are preferred

under Section 482 Cr. P.C. for quashing of the Complaint no. 138/2/2007 titled Shri B.K. Thapliyal v. Rajeev Verma & Ors, qua the petitioners and summoning order dated 14.12.2007 whereby the ld. ACMM took cognizance of the offence and issued summons to the accused persons.

2. The above named petitioners are accused no.3, 4 and 6 respectively in the abovementioned complaint under Sections 132, 135 of the Customs Act, herein after referred to as 'Act'. Petitioner no. 1 is the Director of M/s Seasky Cargo & Travels P. Ltd. Petitioner no.2 is the Director of M/s Borneo Shipping Lines Ltd. and petitioner no.3 is the Chairman of M/s United Liner Agencies Pvt. Ltd. The allegations against the petitioners are that they have assisted accused no. 1 Rajeev Verma (proprietor of M/s Lindt. Exports and M/s High Tech Engineers) and accused no.2 Rajesh Verma (brother of Rajeev Verma) in fraudulently availing duty drawback to the tune of Rs.20,90,13,652/-by issuing Bills of Lading much after date of shipment of goods and mentioned Date of issue. The modus operandi adopted by the accused no. 1 and 2 was that they fraudulently showed goods being exported from India under the Repayment of State Credit Scheme to fictitious consignees in Russia who were either nonexistent or had no export/import operations. The goods never reached Russia and the accused availed drawback against shipping bills showing exports to Russian consignees.

3. The role of the petitioners as alleged in the complaint was that apart from preparing belated Bills of Lading, they did not mention the date of taking charge of the goods on the Bills of Lading prepared by them. In some cases, the Bills of Lading have been shown issued three/four months after the date of shipment so as to make the documents negotiable in the Bank under

Article 23(ii) and Article 24(ii) of ICC Uniform Customs and Practice for Documentary Credits. Thus, it is alleged that the petitioners have actively connived with M/s Lindt. Exports and M/s High Tech Engineers in manipulating the export date on the documents and getting them negotiated in the Bank, which would have otherwise not been entertained by the Bank. The actions of the petitioners enabled M/s Lindt. Exports and M/s High Tech to negotiate the documents for remittances and claim drawback deceitfully.

4. A show cause notice was issued under the Act to all the accused persons which was adjudicated by the Commissioner of Central Excise, New Delhi. The adjudicating authority decided the show cause notice vide order dated 31.5.2006 and confirmed the entire demand of duty drawback of Rs.20,90,13,652/- and imposed penalties of Rs. 50 lakhs and 10 lakhs upon accused no. 1 and 2 respectively and Rs. 2 lakhs each on the shipping lines i.e M/s Seasky Cargo & Travels P. Ltd.,M/s Borneo Shipping Lines Ltd. and M/s United Liner Agencies Pvt. Ltd.

5. The learned counsels for the petitioners have assailed the summoning order against them by raising similar pleas that the summoning order is bad in law and the material filed with the compliant fails to make out any case against them. It is also submitted that there is no specific allegation against the petitioners in the complaint and no role has been assigned to them. It is further submitted that in the absence of the companies for which they are working, being arrayed as parties in the complaint, the complaint is vitiated and deserves to be quashed. It is further urged by the petitioners that the necessary ingredients of knowledge and intention are not established against them.

6. Per contra, the counsel for the Department submitted that the complaint against all the accused including the petitioners is based on the incriminating material found by the search party of the department and statements of witnesses and there is sufficient evidence against the petitioners to tie them with their roles as alleged in the complaint regarding the availing of drawback by the prime accused persons.

7. I have the learned counsels for the petitioners and the department and perused the entire record.

8. The powers possessed by this Court under Section 482 of the Code are very wide and the very plenitude of the power requires great caution in its exercise. Court must be careful to see that its decision in exercise of this power is based on sound principle. The inherent power should not be exercised to stifle a legitimate prosecution. This Court should normally refrain from giving a prima facie decision in a case where the entire facts are incomplete and hazy, more so when the evidence has not been collected and produced before the court and the issues involved, whether factual or legal, are of magnitude and cannot be seen in their true perspective without sufficient material. Of course, no hard and fast rule can be laid down in regard to cases in which this Court will exercise its extraordinary jurisdiction of quashing the proceeding at any stage. It would not be proper to analyse the case of the complainant in the light of all probabilities in order to determine whether a conviction would be sustainable and on such premises arrive at a conclusion that the proceedings are to be quashed.

9. It is settled that it would be erroneous to assess the material and conclude that the complaint cannot be proceeded with. In a proceeding instituted on complaint, exercise of the inherent powers to quash the proceedings is called for only in a case where the complaint does not disclose any offence or is frivolous, vexatious or oppressive. If the allegations set out in the complaint do not constitute the offence of which cognizance has been taken by the Magistrate, it is open to this Court to quash the same in exercise of the inherent powers under Section 482 of the Code. It is not, however, necessary that there should be meticulous analysis of the case before the trial to find out whether the case would end in conviction or acquittal. The complaint has to be read as a whole. If it appears that on consideration of the allegations in the light of the statement made on oath of the complainant that the ingredients of the offence or offences are disclosed and there is no material to show that the complaint is mala fide, frivolous or vexatious, in that event there would be no justification for interference by this Court.

10. It is also trite that when a party approaches this Court for quashing of complaint and summoning order, it is not required to embark upon the sifting of the entire evidence and judge whether the accused is guilty or not. Only consideration at that stage before this Court should be whether there is prima facie indication of involvement of the accused in the case alleged or not. In Zandu Pharmaceutical Works Ltd.v Mohd. Sharaful Haque [(2005) 1 SCC 122], the Supreme Court held, "High Court should not assume the role of a trial court and embark upon an enquiry as to reliability of evidence and sustainability of accusation on a reasonable appreciation of such evidence.- If on consideration of the allegations in the light of the statement made on oath of the complainant it appears that the ingredients of the offence or offences

are disclosed and there is no material to show that the complaint is mala fide, frivolous or vexatious, the proceedings cannot be quashed".

11. In Madhavrao Jiwali Rao Scindia and others v Sambhajirao Chandrojirao Angre and others [1988 Crl.L.J. 853], this Court has reiterated the same principle and laid down that when a prosecution at the initial stage is asked to be quashed, the test to be applied by the court is as to whether the uncontroverted allegations as made prima facie establish the offence. Again in the case of State of Bihar v Murad Ali Khan and others [1989 Crl.LJ 1005, Venkatachalian, C.J. [as His Lordship then was] has laid down that the jurisdiction under Section 482 of the Code has to be exercised sparingly and with circumspection and has observed that in exercising that jurisdiction, the High Court should not embark upon an inquiry whether the allegations in the complaint are likely to be established by evidence or not.

12. Having noted the proposition of law, I may now proceed to advert to the submissions of the learned counsel for the parties. The grievance of the petitioners that there is no role assigned to them in the complaint and there is no specific allegation regarding any assistance provided by them to the accused no. 1 and 2 cannot be accepted by any stretch of imagination. On the bare reading of the complaint, it can be seen that there is clear and unequivocal allegation of the various acts committed by the petitioners such as manipulation of the date of export and date on the Bills of Lading of the goods exported, which enabled the accused persons to claim remittance. Para 56 of the complaint clearly states the allegations against the petitioners and the roles attributed to them. Hence, this contention of the petitioners stands refuted.

13. The department has recorded statements of many witnesses and a search was conducted at the official premises of the accused where various incriminating documents and false seals of various enterprises were found. From the perusal of the record, it is seen that the accused no. 1 was also instrumental in exporting goods prior to opening of LC or registration of CL with RBI. Accused no. 1 got released the Bills of Lading much after the date of shipment to hoodwink the Banks so that the documents could be negotiated in the Bank, as Banks were considering the date of Bills of Lading as date of shipment for negotiating the documents . Prima facie the dates on the documents were altered by none other than the petitioners. From all this it cannot be said that the petitioners had no knowledge of the fraud being committed by the accused no. 1 and 2, and they were not at fault. This conduct of the petitioners shows that they were actively involved with the accused persons. Moreover, the ingredients of knowledge and intention are not required to be proved at this stage. It is noted above that at this stage the only thing which is to be considered by the Court is that whether there is enough material to proceed against the petitioners or not. Consequently, this contention of the petitioners stands rejected.

14. The submission of the counsels for the petitioners that in the absence of the companies for which they are working, being arrayed as parties in the complaint, the complaint is vitiated, is without any merit as the proceedings are at the nascent stage. This Court at the stage of start of trial proceedings is not supposed to record any finding on this aspect of the matter.

15. From the facts and circumstances of the case and perusal of the record, it cannot be said that this is a case where the Magistrate has not applied his mind on the material before him and passed a mechanical order. The material on record prima facie shows involvement of the petitioners in the offence alleged against them. Quashing the complaint and summoning order at such a preliminary stage will not serve ends of justice. The petitioners will have ample opportunity to prove their case before the trial Court. Denying the chance of a trial to the prosecution will be against the spirit of law.

16. In view of the above discussion, the petitions being without any merit are dismissed.

M.L. MEHTA, J.

February 24, 2012 rd