Pulikkippoyil .Sharafudheen vs The Superintendent Of Customs ...
2023 Latest Caselaw 7224 Ker

           IN THE HIGH COURT OF KERALA AT ERNAKULAM
                           PRESENT
        THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS
   TUESDAY, THE 27TH DAY OF JUNE 2023 / 6TH ASHADHA, 1945
                 BAIL APPL. NO. 4602 OF 2023
    AGAINST O.S. NO.142 OF 2023 OF AIR CUSTOMS, CALICUT
                     INTERNATIONA AIRPORT
 CRMC 1584/2023 OF II ADDITIONAL SESSIONS COURT,ERNAKULAM


PETITIONERS/ACCUSED NO.2 AND 3:

    1     PULIKKIPPOYIL SHARAFUDHEEN,
          AGED 44 YEARS, S/O. KADER PULIKKIPPOYIL
          PULIKKIPPOYIL HOUSE,
          ELETTIL POST, KODUVALLY VIA,
          KOZHIKODE, PIN - 673572
    2     NADU VEETTIL SHAMEENA
          AGED 37 YEARS, D/O. ABDULLA
          PULIKKIPPOYIL HOUSE,
          ELETTIL POST, KODUVALLY VIA,
          KOZHIKODE, PIN - 673572
          BY ADVS.
          P.MARTIN JOSE
          P.PRIJITH
          THOMAS P.KURUVILLA
          R.GITHESH
          M.A.MOHAMMED SIRAJ
          AJAY BEN JOSE
          MANJUNATH MENON
          SACHIN JACOB AMBAT
          ANNA LINDA EDEN
          HARIKRISHNAN S.
          S.SREEKUMAR (SR.)


RESPONDENT/STATE & COMPLAINANT:

          THE SUPERINTENDENT OF CUSTOMS (AIU),
          AIR CUSTOMS CALICUT INTERNATIONAL AIRPORT
          REPRESENTED BY ITS STANDING COUNSEL,
 B.A. No.4602/23                  -:2:-


             HIGH COURT OF KERALA,
             ERNAKULAM, PIN - 682031




             SRI.SREELAL N. WARRIER, SC



       THIS BAIL APPLICATION HAVING COME UP FOR ADMISSION ON
20.06.2023, THE COURT ON 27.06.2023 PASSED THE FOLLOWING:
 B.A. No.4602/23                        -:3:-




                                                              "C.R."

                    BECHU KURIAN THOMAS, J.
                      ------------------------------------
                         B.A. No.4602 of 2023
                     --------------------------------------
                  Dated this the 27th day of June, 2023

                                 ORDER

Petitioners are husband and wife. They face an indictment for

the offence under section 135 of the Customs Act, 1962 (for short

'the Act') alleging import of gold, the market price of which exceeds

Rupees One Crore. They were taken into custody on 18.05.2023

and hence seek enlargement on bail under section 439 of the Code

of Criminal Procedure, 1973 (for short, 'the Code').

2. Information was received by the Air Intelligence Unit of the

Air Customs, International Airport, Calicut, that one Amjad Mihran

was indulging in smuggling of gold into India using carriers, including

family members. A strict vigil was therefore maintained over the

passengers. Based on the intelligence input, petitioners, who were

travelling from Dubai to Calicut by Spicejet Flight SG 54, were

intercepted at the exit gate of the baggage hall at Calicut Airport on

16-05-2023. As mentioned earlier, they are husband and wife. Upon

a thorough personal search, the Customs Officers seized 950 gms of

gold in a compound form concealed in four capsules in the rectum of

the first petitioner and a further 1198 gms of gold concealed in a

compound form inside the panties worn by the second petitioner. The

total quantity of gold seized from the petitioners was 1977.18 gms

having a value of Rs.1,20,90,456/- in the domestic market. After

recording petitioners' statement under section 108 of the Act, a crime

was registered and Sri.Amjad Mihran was arrayed as the first

accused, while petitioners were arrayed as accused 2 and 3.

Petitioners were thereafter arrested. The bail applications filed before

the Magistrate Court as well as the Sessions Court were rejected,

and hence recourse to this Court, seeking regular bail.

3. Sri.S.Sreekumar, the learned Senior Counsel duly instructed

by Sri. Martin Jose, the learned counsel for the petitioners,

contended that the offences under the Act are generally bailable,

except those that are specified as non-bailable. It was further

submitted that the quantity of gold seized individually from petitioners

1 and 2 alone can be reckoned and so viewed; the offence alleged

against them is bailable and therefore they ought to have been

released by the customs authorities themselves. The learned Senior

Counsel also submitted that the second petitioner is a lady and both

of them have four children, of which the youngest is only four years

and the presence of the parents at home is indispensable. It was

also argued that there are no antecedents against them and hence

considering the period of detention already undergone, petitioners

ought to be released on bail.

4. An objection was filed by the respondent opposing the bail

application. Sri.Sreelal N. Warriar, the learned Standing Counsel for

the Customs Department contended that the offences under section

135 of the Act are non-bailable if the market price of the goods that

are imported illegally is above Rupees One Crore and that the

petitioners, being husband and wife, had together imported gold

worth more than Rupees One Crore and therefore the offence cannot

be treated as bailable. Relying upon the objections to the bail

applications filed, it was pointed out that in the voluntary statement

before the Superintendent of Customs, the petitioners had admitted

their role in smuggling gold and that they had done it as per the

direction of the first petitioner's cousin - Sri.Amjad Mihran, for a

remuneration and also that the gold was handed over to them by one

Sharafudeen at Dubai, an acquaintance of Sri.Amjad Mihran. The

objections further averred that the consequent search conducted at

the residence of Sri. Amjad Mihran revealed incriminating

documents, which have also been seized and that the petitioners are

not cooperating with the investigation and are not revealing the entire

circumstances. It was further pointed out that petitioners are part of

a smuggling gang involving high volume of gold using family

passengers as carriers to evade serious offences and that

considering the gravity of the offence, attempts to overcome the

rigour of the statutory provisions ought to be discarded.

5. I have considered the rival contentions.

6. Section 135 of the Customs Act, 1962, to the extent it is

relevant, reads as below:-

"135. Evasion of duty or prohibitions

(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 mis-declaration 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) xxx

(c) xxx

(d) xxx

(e) xxx

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) xxx (C) xxx (D) xxx (E).xxx 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.

7. The question as to whether the offences under the Act are

bailable or not is specified under section 104(6) of the Act. Since

section 104(1), (6) and (7) of the Act are relevant, they are extracted

as below:

"104. Power to arrest

(1) If an officer of customs empowered in this behalf by general or special order of the Principal Commissioner of Customs or Commissioner of Customs has reason to believe that any person 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.

(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 extension from duty exceeds fifty lakh rupees; or

(e) fraudulently obtaining an instrument for the purposes of this Act or the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992), and such instrument is utilised under this Act, where duty relatable to such utilsation of instrument exceeds fifty lakhs rupees, shall be non-bailable.

(7) Save as otherwise provided in sub-section (6), all other offences under this Act shall be bailable."

8. A perusal of the above statutory provisions make it

abundantly clear that if the goods, which have been misdeclared or

its duty evaded or imported illegally, have a market price of more

than One Crore of rupees, the offence becomes non-bailable.

9. Admittedly, on search of the first petitioner's body, he was

found to possess 950 gms of 24-carat gold, while the second

petitioner possessed 1198 gms of 24-carat gold. Collectively the gold

seized from the petitioners have a value of more than Rs.1.20 Crores

while individually, the value of the gold recovered from each of them

stands less than rupees One Crore.

10. Concededly, petitioners are husband and wife and were

travelling with their children on the same flight. Innovative methods

are adopted by those indulging in smuggling to overcome the rigours

of law. The contention of the respondent that smugglers are now

utilizing family members as carriers to transfer gold of high value, by

splitting the gold into quantities which would fall less than the value of

Rupees One Crore, cannot be brushed aside as insignificant.

11. Until 2013, all offences under the Act were bailable. This

was evident from the erstwhile sub-clause (6) of section 104 of the

Act which stated that "Notwithstanding anything in the Code of

Criminal Procedure, 1973, all offences under the Act shall be

bailable". However, by the Finance Act, 2013 (Act 17 of 2013) dated

10.05.2013, the aforesaid sub-clause (6) was substituted by the

present clause (extracted earlier). Thus after the amendment,

offences other than those excepted under Sec.104(6) of the Act

alone are bailable. Section 104(6)(c) provides that if goods have

been imported without declaration in accordance with the provisions

of the Act, and the value of the goods exceeds one crore of rupees,

then the offence is non-bailable.

12. Smuggling of gold has a deleterious effect on the country's

economy. Curbing the menace of smuggling is essential for the

economic progress of the country. The cut-off value fixed through the

amendment of 2013 for the purpose of treating the conduct of illegal

import or export above that value as a non-bailable offence is with an

avowed purpose. Hence while dealing with innovative attempts to

override the rigour of statutory prescriptions, courts cannot be

oblivious to the amendment and the statutory intent behind such

changes in the law.

13. If the quantity of gold illegally imported was split into

different parts and carried by different persons, all of whom had the

common intention, then the acts done by such persons collectively

can be treated as an act done by each person individually. Such an

approach is necessary, especially when a common thread, such as

that of a family, runs through those body of persons, apart from the

common intention that binds them together. Since during import, the

goods were allegedly split into different parts but carried by family

members, all of whom had presumably a common intention, the

cumulative value of the goods can be taken for identifying whether

the goods were of a value higher than the cut-off value prescribed. In

such circumstances, the word 'person' appearing in section 135 of

the Act should not be given a narrow interpretation to defeat the legal

provision. Thus, if more persons than one act in concert with each

other to evade or attempt to evade customs duty, the combined value

of the articles can be treated as the value of goods imported by each

such person. The collection of such persons will have to be treated

as falling within the term 'any person' in section 135 of the Act.

14. Apart from the above, the General Clauses Act 1897,

defines 'person' in section 3(42). The definition clause reads as

follows: --

"S.3. Definitions - In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context,--

(42) "person" shall include any company or association or body of individuals, whether incorporated or not."

15. It is apposite to notice that the aforesaid definition

contemplates 'a body of persons' also as 'a person'. The cardinal

principle of interpretation of statutes that If an interpretation defeats

the purpose of the Act, such an interpretation ought to be avoided is

also to be borne in mind in this context. Thus the definition of the

word person as appearing in section 135 of the Act must be given a

contextual interpretation.

16. The decision relied upon by the learned Senior Counsel for

the petitioners in Mohd. Tufial v. Union of India and Another (2023

SCC Online All. 98) is, according to me, distinguishable. In the said

decision, the persons from whom the contraband was recovered

were not family members but persons travelling together on a train.

The concept of common intention of the passengers was not borne in

mind by the court while rendering the said judgment. On the other

hand, in the decision in Amal Mubarak Salim Al Reiyami (Smt.)

and Others v. Union of India (2015 SCC Online Raj. 486) it was

held that a pragmatic and realistic view has to be taken in the light of

the amendment made to the Act making the offences above the

value of Rupees One Crore to be non-bailable. The Court observed

that the word 'any person' does not mean only one person but even

more than one person, if they had jointly and knowingly involved

themselves in fraudulent evasion or attempted evasion of customs

duty chargeable. It was also observed that if more than one person

acts in concert with each other to evade or attempt to evade customs

duty, all of them together can be treated as 'any person' within the

meaning of section 135 of the Act. I am in agreement with the

aforesaid proposition of the Rajasthan High Court.

17. Thus, the quantity collectively carried by the petitioners can

be treated as the quantity carried by each of them individually for

ascertaining the value of goods imported. Considering the

circumstances of the case, it is held, for the purpose of this bail

application, that petitioners were carrying gold individually worth

more than Rs.1.20 Crores, and hence the offence alleged against

them is a non-bailable offence.

18. Be that as it may, petitioners were arrested on 18.05.2023,

and they have been in custody since then. The interrogation of the

petitioners ought to have been completed by now. The second

petitioner is a lady and is the mother of four young children. She

claims to have been induced by her husband and his cousin to act as

a carrier for remuneration. Both parents of those four children are

under custody. The youngest of the four children is a four-year-old.

Taking into reckoning the aforesaid circumstances and the period of

detention already undergone from 18-05-2023, this Court is of the

opinion that further detention of the second petitioner is not essential

for the purpose of an effective investigation. Therefore the second

petitioner is entitled to be released on bail.

19. However, as far as the first petitioner is considered, though

the investigation has proceeded significantly, he is stated to be not

cooperating. The first petitioner is the person who allegedly induced

the second petitioner also to act as a carrier. The first accused is

allegedly a cousin of the first petitioner. The first accused is stated to

be involved in several smuggling activities. More information is yet to

be obtained regarding the antecedents of the first accused. Non-

cooperation of the first petitioner is prejudicing the investigation.

Taking note of the circumstances of the case, I am of the view that

the first petitioner is not entitled to be released on bail at this

juncture.

20. In the result, the bail application of the first petitioner is

dismissed, and that of the second petitioner is allowed on the

following conditions.

(a) 2nd petitioner shall be released on bail on her executing a bond for Rs.1,00,000/- (Rupees One Lakh only) with two solvent sureties each for the like sum to the satisfaction of the court having jurisdiction.

(b) 2nd petitioner shall appear before the Investigating Officer as and when required and cooperate with the investigation.

(c) 2nd petitioner shall not intimidate or attempt to influence the witnesses; nor shall she tamper with the evidence.

(d) 2nd petitioner shall not commit any similar offences while she is on bail.

(e) 2nd petitioner shall not leave Kerala without the permission of the Court having jurisdiction and shall surrender her passport before the jurisdictional Court.

21. In case of violation of any of the above conditions, the

jurisdictional Court shall be empowered to consider the application

for cancellation, if any, and pass appropriate orders in accordance

with the law, notwithstanding the bail having been granted by this

Court.

In the result, this bail application is allowed in part. The

application of the first petitioner is dismissed and that of the second

petitioner is allowed.

BECHU KURIAN THOMAS JUDGE vps