Telangana High Court

Pushpalata Bai And 4 Others vs Directorate Of Revenue ... on 15 July, 2022

Bench: G.Radha Rani

           THE HON'BLE Dr. JUSTICE G. RADHA RANI

                 WRIT PETITION No.12250 OF 2021

ORDER:

This writ petition is filed by the petitioners No.1 to 5 to issue writ of

mandamus to declare the action of the respondents in summoning the

petitioners under Section 108 of the Customs Act, 1962, as illegal and

contrary to the provisions of the Cr.P.C., and to direct the respondents to

record the statement of the petitioners through video conferencing.

2. The case of the Enforcement Directorate as stated by the

respondents in their counter affidavit was that M/s. Sri Krishna Exim LLP

(SKELLP) was a SEZ Unit, located at SDF-3A, Sy.No.1/1, Ravirala

Village Road, Ranga Reddy District, Telangana. One Sri Pradeep Kumar

was the Managing Partner of SKELLP. The 1st petitioner Smt. Pushpalata

Bai and 2nd petitioner Sri Shiv Charan were the parents of Pradeep Kumar.

The 3rd petitioner Bharati Agarwal was the wife of Pradeep Kumar.

Petitioner Nos.4 and 5 were the sons of Pradeep Kumar. SKELLP was one

of the group companies of Sri Krishna Group, Hyderabad. Sri Shiv Charan

was the Chairman and his son Pradeep Kumar was the Vice-Chairman and

the Managing Director of Sri Krishna Group. M/s. Sri Krishna Jewellery

Private Limited (SKJPL) was also one of the group companies of Dr.GRR,J

Sri Krishna Group, Hyderabad. SKELLP imported huge quantity of duty

free gold under SEZ provisions to use the same for manufacturing and

export of gold jewellery. SKELLP clandestinely diverted duty free gold

into the domestic market and exported fake ornaments made from little

quantity of gold by mis-declaring them as studded jewellery. Basing on

intelligence that SKELLP was mis-declaring the export goods and was

clandestinely diverting the gold generated out of such mis-declaration into

local market, the officers of Directorate of Revenue Intelligence (DRI),

Hyderabad Zonal Unit, intercepted one Sri B. Venkatesh, Assistant

Security Officer, SKJPL at Siddiamber Bazar, Hyderabad on 03.05.2019

and seized 10 kgs., of foreign marked gold bars i.e. 10 gold bars of 1 kg.

each, with defaced serial numbers under panchanama dated 03.05.2019. A

series of simultaneous and follow-up searches were then conducted.

As per preliminary estimates, huge quantity of SEZ imported duty free

gold valued at several hundreds of crores had been fraudulently diverted

and sold in the local market by SKELLP, resulting in evasion of a

substantial amount of customs duty, which would have otherwise been

payable. Their further investigation revealed that such overvalued

amounts were being brought back into the country through money

laundering by a complex web of hawala operators from Hong Kong Dr.GRR,J

through a subsidiary company namely M/s. Krishe Limited Hong Kong.

Such mis-declared goods were exported to the subsidiary company Krishe

Limited in Hong Kong. The 3rd petitioner - Smt. Bharati Agarwal was one

of the Directors of Krishe Limited. During the search and seizure

operations conducted by DRI, Hyderabad Zonal Unit in relation to mis-

declaration of exports and diversion of imported gold by SKELLP, various

incriminating goods such as imported gold bars, gold jewellery, precious

stones, semi-precious stones, diamonds and Indian currency, totally valued

at Rs.24,27,84,351/- were seized under the Customs Act, 1962. The DRI,

Hyderabad Zonal Unit booked a case against SKELLP for diversion of

imported foreign marked gold and mis-declaration of exports. During the

course of investigation in relation to mis-declaration and smuggling of

gold by SKELLP and SKJPL, statements of several persons, including the

Managing Partner/Director Sri Pradeep Kumar were recorded under the

provisions of the Customs Act, 1962. During the course of investigation

into SKELLP, the respondents noticed that SKJPL was also diverting duty-

free imported gold obtained from the nominated agency, i.e. MMTC

Limited and evaded customs duty and violated the provisions of the

Outright Purchase Scheme of the Foreign Trade Policy.

Dr.GRR,J

2.1. As per the preliminary estimates, the duty-free gold obtained

from MMTC Limited which was valued at tens of crores of rupees, had

been fraudulently diverted and sold in the local market by SKJPL,

resulting in evasion of a substantial amount of customs duty. On 3rd and

4th May, 2019, a search was conducted at the premises of SKJPL and the

officers of DRI, Hyderabad Zonal Unit seized two gold bars of 1 kg. (1000

gms.) each and 195 gold bars of 100 grams each on a reasonable belief that

the same were liable to be confiscated under the provisions of the Customs

Act, 1962. Their investigation further revealed that duty-free gold

smuggled by SKELLP and SKJPL was sold in the local market among

others, to two gold bullion traders based in Siddiamber Bazar Road,

Hyderabad and Gunfoundry, Hyderabad. The sale proceeds of smuggled

gold of Rs.62,00,000/- and Rs.1,62,00,000/- were seized from the said two

gold bullion traders under panchanamas dated 14.05.2019 and 16.05.2019

respectively on a reasonable belief that the same were liable to be

confiscated under the provisions of Customs Act, 1962. The search and

seizure operations conducted by DRI, Hyderabad Zonal Unit in relation to

mis-declaration of exports and diversion of imported gold by SKELLP and

SKJPL also resulted in recovery of lot of material evidence in the form of

documentary records and vast electronic data. The electronic data was sent Dr.GRR,J

for forensic examination and the report on the same was also received.

The petitioners had to be examined regarding the documentary evidence

recovered and also the electronic data received after forensic examination.

As several instances of smuggling were unearthed during the course of

investigation and recording of crucial statements of higher management of

SKELLP and SKJPL, DRI, Hyderabad Zonal Unit issued summons under

Section 108 of the Customs Act, 1962 to all the partners and Directors of

SKELLP and SKJPL to give evidence in order to ascertain the entire extent

of smuggling activities and the role played by the petitioners.

3. In this factual background, the petitioners filed this writ petition

contending that the investigation in regard to the alleged mis-declaration of

exports and diversion of imported gold by M/s.SKELLP and M/s.SKJPL

was already complete as show cause notice under Section 124 of the

Customs Act had been issued by the respondents in the two cases. Hence,

issuance of the impugned summons under Section 108 of the Customs Act

to the petitioners was an abuse of process of law. The Hon'ble Apex Court

in the case of the petitioners itself in W.P. (Crl.) No.329 of 2020 vide order

dated 29.10.2020 directed the respondents not to take any coercive steps

against the petitioners. The said petition was still pending before the

Hon'ble Supreme Court. During the current pandemic situation, when Dr.GRR,J

there was surge of covid cases, the respondents could not insist upon the

physical presence of the petitioners. Proviso to Section 160 Cr.P.C. was

mandatory in respect of women and persons aged above 65 years. Article

15(3) of the Constitution of India contemplated that State was entitled to

make special provisions for safeguarding the rights and liberty of women

and children. Proviso to Section 160 Cr.P.C. was an example of such a

provision to safeguard the liberties and dignities of women and it would

cast a bounden duty upon the investigating agency to take the statement of

a woman or a child at their place of residence. The 1st petitioner was an

old lady aged about 72 years, the 3rd petitioner was a lady aged about 50

years and the 2nd petitioner was a senior citizen aged about 80 years.

Therefore, the respondents could not insist upon their physical presence in

view of the proviso to Section 160 Cr.P.C. The impugned summons were

contrary to the said mandatory statutory provision. The exemption granted

by the Statute was absolute and should not be violated by the respondents.

3.1 It was further contended that the statements recorded by the

respondent were akin to the statements under Section 161 Cr.P.C. Thus,

the petitioners were entitled to the benefit of proviso to Section 160

Cr.P.C. The petitioners were law abiding citizens and always cooperated

during the course of investigation. There was no necessity of seeking their Dr.GRR,J

personal presence by the respondents. Seeking their personal presence was

only to harass the petitioners. The petitioners were ready and willing to

cooperate in the enquiry and could join the investigation through video

conference. The statement made by a summoned person could be used

against their own interest, in case they were made as an accused. The

petitioners were still not aware whether they were being called as a witness

or as an accused. The compelling attendance of the petitioners was

violative of Article 20 (3) of the Constitution of India as well as the

provisions of Section 91 of Cr.P.C. Section 108 of Customs Act would

provide that the summoned person was bound by the statement. The

proceedings conducted were judicial proceedings within the meaning of

Sections 193 and 228 IPC. The petitioners were apprehending that while

recording their statements in person under Section 108 of the Customs Act,

they might be arrested and forced to give statements incriminating

themselves. Having no other alternative remedy, the petitioners filed this

petition.

4. Heard Sri Mayank Jain, learned counsel representing Sri Vimal

Varma Vasireddy, learned counsel for the petitioners and Sri T. Surya

Karan Reddy, learned Additional Solicitor General of India for the

respondents.

Dr.GRR,J

5. Learned counsel for the petitioners submitted that the impugned

summons were contrary to the proviso to subsection (1) of Section 160

Cr.P.C., which provided that no woman or male person above 65 years of

age shall be required to attend at any place other than the place he/she

resides for the purpose of investigation. The summons issued to the

petitioners required personal hearing of the petitioners. The exemption

granted by the Statute was absolute. The Delhi High Court in the case of

Asmita Agarwal v. Enforcement Directorate1 held that Section 160

Cr.P.C. would also apply to the officers of Enforcement Directorate. In the

said case, it was further held by the Delhi High Court that the woman

petitioner could be investigated at her residence in terms of Section 160

Cr.P.C. as Foreign Exchange Regulation Act, 1973 (FERA) was silent on

the said aspect. Section 108 of the Customs Act was in pari materia with

Section 50 of the Prevention of Money Laundering Act. Therefore, the

Officers of Department of Revenue of Intelligence were bound by the

provisions contained in Section 160 Cr.P.C. He also relied upon the

judgment of the Delhi High Court in the case of Hanumanthaiah G. v.

Assistant Director, Enforcement Directorate2, wherein the High Court

directed the petitioners to join the enquiry through video conferencing.

2002 Crl.L.J. 819

WP (Crl.) No.1651 of 2020 dated 09.10.2020 Dr.GRR,J

6. Learned Additional Solicitor General of India submitted that the

petitioners, instead of appearing before the Authorities and clarifying the

facts, approached this Court seeking directions to carry out audio/video

recordings of proceedings in the presence of the petitioners' Advocate at a

visible but not audible distance during the course of interrogation / or

recording of any statements of the petitioners in respect of the investigation

arising under a Special Act, i.e. the Customs Act, 1962. The Hon'ble

Apex Court vide order dated 29.10.2020 in WP (Crl.) No.329 of 2020

issued notice and directed that no coercive steps should be taken against

the petitioners. The Hon'ble Apex Court was yet to pronounce orders on

the main plea of the petitioners. The DRI, Hyderabad Zonal Unit filed a

counter affidavit in the said writ petition. There was in fact evidence to

suggest that the petitioners were involved either directly or indirectly in the

smuggling of duty free gold from SKELLP in Hyderabad Gems SEZ

Limited or from MMTC Limited. As the issue was time bound and the

Managing Partner/Managing Director Shri Pradeep Kumar was going

abroad frequently under the guise of business development, DRI,

Hyderabad Zonal Unit to speed up the investigation issued summons dated

27.04.2021 to the petitioners for their appearance.

Dr.GRR,J

6.1. He further contended that the Customs Officers under the

Customs Act, 1962, were not police officers as stated under Chapter-XII of

Cr.P.C. or for any other purpose. Wherever Cr.P.C. was applicable to an

investigation under the Customs Act, 1962, the same had been specifically

provided in the said Act. The statements recorded under Section 108 of

the Customs Act were distinct and different from the statements recorded

by the police officers under Section 161 Cr.P.C. The summons were

issued under Section 108 of the Customs Act, 1962 but not under Section

161 Cr.P.C. The provisions of Sections 160 and 161 Cr.P.C., which were

only applicable to a Police Officer, could not be imported to the Customs

Act. The petitioners No.1, 2 and 3 were not entitled to the protection under

the proviso to sub-Section (1) of Section 160 Cr.P.C. The Customs Act,

1962 was a self contained Act containing provisions relating to enquiry

into the offences relating to import, export and smuggling of goods and

punishments thereof. The scheme of Customs Act, 1962 would provide

for conduct of investigation for adjudication which was of quasi-judicial in

nature as well as for prosecution of the offenders under Section 135 of the

Customs Act, 1962. In view of the special provisions regulating the

manner or place of investigation, enquiry, trial or otherwise dealing with Dr.GRR,J

such offence under the Customs Act, 1962, the provisions of the customs

Act would prevail over the provisions of Cr.P.C.

6.2. He further contended that the petitioners' prayer to record the

statements through video conferencing was not possible as the data was

huge and confidential and could not be shared online. The petitioners were

praying for video conferencing only to view the complete evidence

available with the Department and to prepare a ground against the same.

He relied upon the judgment of the High Court of Delhi in P.V. Rao v.

Senior Intelligence Officer, Directorate General of GST Intelligence &

Ors.3, wherein a similar prayer made by the petitioner therein to record his

statement through video conference was rejected by the Delhi High Court.

He further contended that the investigation was in its final stage and the

DRI was waiting to record the statements of the petitioners who were

Partners/Directors/Senior Management on the incriminating evidence

available with the Department. He further agreed to omit the presence of

the petitioners No.1 and 2 and requested to direct atleast the petitioners

No.3 to 5 to comply with the summons and to give statements in person

without further delay.

WP (C) No.8975 of 2020 dt.18.11.2020 Dr.GRR,J

7. In the light of the contentions of both the learned counsel, the

point to be decided is whether the provisions of Section 160 Cr.P.C. are

applicable to Section 108 of the Customs Act, 1962.

8. It is considered necessary to extract the relevant provisions under

Sections 4, 5, 160 and 161 of Cr.P.C. and Section 108 of the Customs Act,

1962 for appreciation of law on the subject. The provisions of Cr.P.C. are

applicable to all the offences under IPC and also to the offences under

other laws subject to the provisions in the said enactments dealing with the

relevant aspects on investigation, enquiry and trial.

9. Section 4 of Cr.P.C. reads as follows:

"4. Trial of offences under the Indian Penal Code and other laws:

(1) All offences under the Indian Penal Code (45 of 1860) shall be investigated, inquired into, tried, and otherwise dealt with according to the provisions hereinafter contained.

(2) All offences under any other law shall be investigated, inquired into, tried, and otherwise dealt with according to the same provisions, but subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences."

10. A savings clause is provided under Section 5 of Cr.P.C. as

follows:

Dr.GRR,J

"5. Saving:

Nothing contained in this Code shall, in the absence of a specific provision to the contrary, affect any special or local law for the time being in force, or any special jurisdiction or power conferred, or any special form of procedure prescribed, by any other law for the time being in force."

10. Thus, the provisions of Cr.P.C. cannot be applied to a special

law, if it is in conflict with it.

11. Section 160 Cr.P.C. is provided under Chapter - XII of the

Cr.P.C. It is relating to information to the police and their powers to

investigate and it is also pertaining to police officers power to require

attendance of the witnesses. Section 161 Cr.P.C. is with regard to

examination of witnesses by police. Sections 160 and 161 Cr.P.C. read as

follows:

"160. Police officer's power to require attendance of witnesses:

(1) Any police officer, making an investigation under this Chapter may, by order in writing, require the attendance before himself of any person being within the limits of his own or any adjoining station who, from the information given or otherwise, appears to be acquainted with the facts and circumstances of the case; and such person shall attend as so required:

Provided that no male person under the age of fifteen years or woman shall be required to attend at any place other than the place in which such male person or woman resides.

(2) The State Government may, by rules made in this behalf, provide for the payment by the police officer of the reasonable expenses of every person, attending under sub- section (1) at any place other than his residence.

Dr.GRR,J

161. Examination of witnesses by police:

(1) Any police officer making an investigation under this Chapter, or any police officer not below such rank as the State Government may, by general or special order, prescribe in this behalf, acting on the requisition of such officer, may examine orally any person supposed to be acquainted with the facts and circumstances of the case.

(2) Such person shall be bound to answer truly all questions relating to such case put to him by such officer, other than questions the answers to which would have a tendency to expose him to a criminal charge or to a penalty or forfeiture.

(3) The police officer may reduce into writing any statement made to him in the course of an examination under this section; and if he does so, he shall make a separate and true record of the statement of each such person whose statement he records."

Provided that statement made under this sub-section may also be recorded by audio-video electronic means.

Provided further that the statement of a woman against whom an offence under Section 354, Section 354-A, Section 354-B, Section 354-C, Section 354-D Section 376, Section 376-A, Section 376-AB, Section 376-B, Section 376-C, Section 376-D, Section 376-DA, Section 376-DB, Section 376-E or Section 509 of the Indian Penal Code (45 of 1860) is alleged to have been committed or attempted shall be recorded, by a woman police officer or any woman officer."

12. As the summons were issued to the petitioners under Section

108 of the Customs Act, it is considered necessary to extract Section 108

of the Customs Act, 1962. It reads as follows:

"108. Power to summon persons to give evidence and produce documents:

(1) Any gazetted officer of customs duly empowered by the Central Government in this behalf, shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making under this Act.

Dr.GRR,J

(2) A summons to produce documents or other things may be for the production of certain specified documents or things or for the production of all documents or things of a certain description in the possession or under control of the person summoned.

(3) All persons so summoned shall be bound to attend either in person or by an authorised agent as such officer may direct; and all persons so summoned shall be bound to state the truth upon any subject, respecting which they are examined or make statements and produce such documents and other things as may be required: Provided that the exemption under section 132 of the Code of Civil Procedure, 1908 (5 of 1908), shall be applicable to any requisition for attendance under this section.

(4) Every such inquiry as aforesaid shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860)."

13. Sections 160 and 161 Cr.P.C. relate to investigation of an

offence by a police officer. The various provisions of Chapter-XII of

Cr.P.C. further reveal that there is express mention of Police

Officer/Officer In-charge of a police station used in all the Sections

governing investigations under the said Chapter.

14. The learned Additional Solicitor General of India submitted that

the Customs Officers under the Customs Act, 1962 were not police officers

for the purpose of Chapter XII of Cr.P.C. or for any other purpose and

relied upon the judgment of the Hon'ble Supreme Court in the case of Dr.GRR,J

State of Punjab v. Barkat Ram4. The Hon'ble Apex Court while

considering whether a Customs Officer was a Police Officer for the

purposes of Section 25 of the Indian Evidence Act after considering the

powers and duties of the Police Officers under the Police Act, as well as

the duties of the Customs Officers under the Customs Act, 1962 held that:

"We are therefore of opinion that the duties of the Customs Officers are very much different from those of the police officers and that their possessing certain powers, which may have similarity with those of police officers, for the purpose of detecting the smuggling of goods and the persons responsible for it would not make them police officers."

15. He also relied upon the judgment of the High Court of Bombay

in Pukhraj Pannalal Shah v. K.K. Ganguly5, wherein it was held that:

"21. The resume of the various provisions made above clearly indicates that the whole purpose of the Act of 1962 is to safeguard the revenues of the country and its economy. It has nothing to do with the maintenance of law and order to prevention of crimes. It is intended to prevent evasion of duty and in order that the duty might not be evaded, the evasion is made an offence and it is only to a limited extent and for that limited purpose that powers of searches, seizure and investigation are given to the Customs officers. Further reference to the provisions also shows that it is not obligatory on the Customs authorities to prosecute every person who has violated the provisions of the Act of 1962. Indeed, it must depend upon the facts of each case. There may be cases which are not of much importance and there may also be cases which by their gravity might be serious. In some cases no prosecution might be called for while in the other prosecution may become necessary. If, therefore, the test as laid down in Badaku Joti's case, , is to be applied, inasmuch as the Customs officers are not

(1962) 3 SCR 338

(1968) Crl LJ 1617 Dr.GRR,J

equated with police officers acting under the Criminal Procedure Code and are not bound to make a report, it is clear that they cannot be regarded as police officers and statements recorded by them cannot be hit by S. 25 of the Indian Evidence Act."

16. In the above judgments, the Hon'ble Apex Court as well as the

High Court of Bombay after dwelling into the functionality and the

underlying objects behind the power of investigation granted to the police

and power to search, seize and arrest granted to Customs/Excise Officer

arrived at the finding that the two cannot be equated.

17. The learned Additional Solicitor General of India submitted that

under the Customs Act, 1962, wherever the Act intended that the Customs

Officer should be treated on par with a Police Officer, a specific provision

was incorporated to that effect and made a reference to Section 104(3) of

the Customs Act. It reads as under:

"104. Power to arrest:

(3) Where an officer of customs has arrested any person under sub-section (1), he shall, for the purpose of releasing such person on bail or otherwise, have the same power and be subject to the same provisions as the officer-in-charge of a police station has and is subject to under the Code of Criminal Procedure, 1898 (5 of 1898)."

18. He contended that if all the provisions of Chapter-XII of

Cr.P.C., were interpreted as applying to investigations/enquiries under the Dr.GRR,J

Customs Act or any form of exercise of power by a Customs Officer under

Chapter-XIII of the Customs Act, 1962, then the aforesaid Section 104 (3)

would be rendered otiose.

19. On a careful perusal of the various provisions of the Customs

Act, the contention of the learned Additional Solicitor General of India

appears to be valid. Not only under Section 104(3) relating to arrest, but

also under Section 105(2) relating to search of premises it was specifically

mentioned that the Code of Criminal Procedure is applicable. Under

Section 108(3) prviso, it is stated that the exemption under Section 132 of

the Code of Civil Procedure shall be applicable. Thus, wherever the

concerned provisions are applicable, it is specifically stated in the Act.

20. Learned counsel for the petitioners, on the other hand, relied

upon the judgment of the High Court of Gujarat in Fozia Godil v. Union

of India6, wherein the petitioner was summoned under Section 50 of the

Prevention of Money Laundering Act (PML Act) for recording her

statement and the petitioner filed the petition contending that she being a

woman in the absence of compliance of Section 160 Cr.P.C., the summons

were not sustainable, it was held that:

2014 SCC OnLine Guj 3417 Dr.GRR,J

"42. However, so far as petitioner-Foziya Samir Godil is concerned, being a woman, it is rightly contended by the learned counsel for the petitioners that she is entitled to benefits of all the procedures applicable to the woman under the relevant law and to that extent, the respondents at the threshold shall have to comply with the provisions of law.

43. The contention that exclusive procedure for summoning a person under Section 50 not providing the safeguards to a woman as under various provisions of Cr.P.C. and therefore, no benefit as is available to the woman under Cr.P.C. can be conferred upon her, is devoid of merits and suffers from misconception of law inasmuch as concededly by virtue of Section 65 of P.M.L. Act, provisions of Cr.P.C. as are not inconsistent with the provisions of P.M.L. Act are applicable to the proceedings under P.M.L. Act and it cannot be said that the provisions providing safeguard to a woman under Cr.P.C. cannot stand with the provisions of P.M.L. Act and therefore, such provisions cannot be said to be inconsistent with P.M.L. Act."

21. In the PML Act, there is a specific provision under Section 65

stating that the provisions of Cr.P.C. are applied insofar as they are not

inconsistent with the provisions of the said Act to arrest, search and

seizure, attachment, confiscation, investigation, prosecution and all other

proceedings under the Act. But, there is no such specific provision in the

Customs Act, 1962, applying the Code of Criminal Procedure to all the

provisions relating to the stages of investigation, trial etc.

22. Learned counsel for the petitioners relied upon the judgment of

the Delhi High Court in Asmita Agarwal (1 supra), wherein while

considering whether the provisions of Cr.P.C. would apply to an Dr.GRR,J

investigation carried under FERA, it was held by the Delhi High Court

that:

"7. Contention of Mr. K.K. Sud, Addl. Solicitor General, that by directing to investigate here at here residence there has been a violation of the provision of FERA. We find no substance in this contention. Section 4 of the Code of Criminal Procedure deals with the trial of offence under the Indian Penal Code and other laws. Perusal of Sub Section 2 of Section 4 show that all offences shall be investigated, inquired into, tried, and otherwise dealt with under the same provision and the Code subject to the condition that if there is any enactment or a special Code regulating the manner or place of investigating, inquiring into, trying or otherwise then the Code will not apply. But as already pointed out above, FERA even though a special Code or enactment, nowhere provides as to where the investigation of woman is to be carried. therefore, in the absence of any provision available in the special enactment, the provision of Code would apply as laid down under Section 4(2) of the Code. In this respect reference can be made to the decision of the Supreme Court in the case of Directorate of Enforcement v. Deepak Mahajan and Anr. (Supra). In this case Apex Court held that the operation of Section 4(2) of the code is straightaway attributed to the areas of investigation, enquiry and trial of offences under the special laws including the FERA and the customs. Section 4 is comprehensive and that Section 5 is not in derogation of Section 4(2) of the Code. it only relates to the extent of application of the Code in the matter of territorial and other jurisdiction but does not nullify the effect of Section 4(2) of the code. It has further been observed that the provision of the Code would be applicable to the extent in the absence of any contrary provision in the special Act or any other special provision excluding the jurisdiction or applicability of the Code. That reading of Section 2 of the Code r/w Section 26(b) which governs any criminal proceeding as regards the course of which an offence is to be tried and as to the procedure to be followed renders the provision of the Code applicable in the field not covered by the provision of FERA or Customs Act. Admittedly, Apex Court in Deepak Mahajan's case (Supra) was not dealing with the proviso of Section 160 Cr.P.C. but was dealing with the applicability of Section 167 of the Code to a case to be filed under FERA. It is not denied that Section 160 and Section 167 of the Code fall under the same Chapter i.e. Chapter XII under the title "Information to the police and their power to investigate". It Dr.GRR,J

was while dealing with and interpreting Section 167 Cr.P.C. under Chapter XII the Apex Court made the observation in Deepak Mahajan's case (Supra). The fact of the matter is that once the special legislation or enactment like FERA is silent with regard to certain procedure like where to investigate a woman, one cannot but have to have recourse to the code. Admittedly FERA is silent in this respect regarding investigation a woman or a minor under the FERA, therefore, we are of the view that the provisions of Section 160 of the code would apply in the facts of this case. It may, however, be made clear that the petitioner will fully co-operate with the investigating officer."

23. Learned counsel for the petitioners contended that the

provisions under the FERA and the Customs Act were in pari materia and

they were applicable to Customs Act also. But, the Hon'ble Apex Court in

Poolpandi v. Superintendent, Central Excise & Ors.,7 while considering

the question whether a person is entitled to aid of counsel while

questioning him during investigation under the provisions of the Customs

Act or the Foreign Exchange Regulation Act, 1973, (FERA) held that:

"The persons being interrogated during investigation under the provisions of the Customs Act, 1962 or the Foreign Exchange Regulation Act, 1973 are not accused in the meaning of Article 20(3) of the Constitution and the right reserved by the Constitution in favour of accused persons cannot be expanded to be enjoyed by others."

It further held that:

"Applying the 'just fair and reasonable test', it cannot be said that calling a person away from his own house and

(1992) 3 SCC 259 Dr.GRR,J

questioning him in the atmosphere of the customs office without the assistance of his lawyer or his friends either violates his constitutional right under Article 21 or amounts to mental torture.

The purpose of the enquiry under the Customs Act and the other similar statutes will be completely frustrated if the whims of the persons in possession of useful information for the departments are allowed to prevail. For achieving the object of such an enquiry if the appropriate authorities be of the view that such persons should be dissociated from the atmosphere and the company of persons who provide encouragement to them in adopting a non- cooperative attitude to the machineries of law, there cannot be any legitimate objection in depriving them of such company. The relevant provisions of the Constitution in this regard have to be construed in the spirit they were made and the benefits thereunder should not be expanded to favour exploiters engaged in tax evasion at the cost of public exchequer."

24. Admittedly, the Hon'ble Apex Court observed in Pool Pandi's

case that it was not at the whims of the person that the investigation should

be done at his or her convenience. Hence, the petitioners could not take

shelter of the judgment of the Delhi High court when it was not in

accordance with the judgment of the Hon'ble Apex Court in the above

case.

25. The Hon'ble Apex Court while considering the challenge to the

proviso to Section 108 on the ground that it was violative of Article 20(3) Dr.GRR,J

of the Constitution of India in Veera Ibrahim v. The State of

Maharashtra8 observed that:

"When the statement of a person was recorded by the Customs Officer under Section 108, that person was not a person 'accused of any offence' under the Customs Act. An accusation which would stamp him with the character of such a person was levelled only when the complaint was filed against him, by the Assistant Collector of Customs complaining of the commission of offences under Section 135(1) and Section 135(2) of the Customs Act. It is, therefore, clear that when the Summons is issued under Section 108, he is merely called upon to give his evidence for departmental proceedings and, therefore, there is no question of it being in violation of Article 20(3) of the Constitution of India. Similarly, provisions of Section 108 of the Customs Act have also come up for consideration before the Hon'ble Supreme Court in the case of Assistant Collector of Central Excise, Rajahmundry v. Duncan Agro Industries Ltd. and Ors. wherein it is held that Section 108 of the Customs Act does not contemplate any magisterial intervention. The power under the said Section is intended to be exercised by a Gazetted Officer of the Customs department. Sub-section (3) enjoins on the person summoned by the Officer to state the truth upon any subject respecting which he is examined. He is not excused from speaking the truth on the premise that such statement could be used against him. The said requirement is included in the provision for the purpose of enabling the Gazetted Officer to elicit the truth from the persons interrogated. Therefore, the challenge on the ground of violation of Article 20(3) is equally untenable. Support can also be derived from the decision of the Hon'ble Supreme Court in the case of Percy Rustomji Basta v. The State of Maharashtra wherein it is held that a person summoned under Section 108 of the Customs Act is bound to appear and state the truth when giving evidence. The fact that the petitioners have chosen not to appear itself is indicative of the intention of the petitioners to evade participating in the investigation process. It cannot be expected that the department should adopt a system or practice of going to different places for the purposes of recording the statements of the persons under Section 108 of the Act during the course of investigation. For all these reasons, we are of the view that the provisions contained in Section 108 of the Customs Act are in accordance

1976 AIR 1167 Dr.GRR,J

with the constitutional principles and they are not violative of either Article 14 or 20(3) of the Constitution of India."

26. In Union of India v. Padam Narayan Agarwal9 the Hon'ble

Apex Court held that:

"The power to arrest a person by a Customs Officer is statutory in character and cannot be interfered with. Referring to Section 108 of the Customs Act, it was held that Section 108 does not contemplate magisterial intervention. The power is exercised by a Gazetted Officer of the Department. It obliges the person summoned to state truth upon any subject respecting which he is examined. He is not absolved from speaking truth on the ground that such statement is admissible in evidence and could be used against him. Section 108 of the Customs Act enables the officer to elicit truth from the person examined. The underlying object of Section 108 is to ensure that the officer questioning the person gets all the truth concerning the incident. It was also held that the statements recorded under Section 108 of the Customs Act are distinct and different from the statements recorded by police officers during the course of investigation under the Code. The Supreme Court followed the decisions in Ramesh Chandra Mehta v, The State of West Bengal, AIR 1970 SC 940, and Assistant Collector of Central Excise, Rajahmundry v. Duncan Agro Industries Ltd., (2000)7 SCC 53."

27. The learned counsel relied upon the interim orders passed in

WP Nos.32848 and 32849 of 2016 with regard to the applicability of

Section 160 Cr.P.C. and whether the petitioner was justified in taking

umbrage under the said provision or whether the provision of PML Act

would prevail over the provisions of Cr.P.C., wherein it was held that:

AIR 2009 SC 254 Dr.GRR,J

"Until further orders, the 2nd respondent is directed not to proceed with pursuant to the impugned order and the matter shall be kept in abeyance."

As the said order is only an interim order and not a final order and also

under the provisions of PML Act which is distinct and different from the

Customs Act, 1962, the same is considered as not relevant to the facts of

the case.

28. He relied upon the judgment of the Gauhati High Court in

Pusma Investment (P) Ltd., v. State of Meghalaya & Others10. It is

with regard to the notice issued by the Deputy Superintendent of Police,

CID Headquarters, Meghalaya, Shillong, requiring the presence of the

petitioners who were residing in New Delhi to appear before him at

Shillong for recording their statements and for production of some

documents in connection with a case registered against them with Laban

Police Station. The Court quashed the notices observing that Section 160

Cr.P.C. authorized the Police Officer making an investigation by order in

writing to require the attendance before himself on any person who was

residing within the limits of his own police station or any adjoining police

station, but could not summon persons residing in another State.

(2010) 1 Gauhati Law Reports 74 Dr.GRR,J

29. In the said connection it was observed that under the proviso to

sub-Section (1) of Section 160 Cr.P.C., firstly, the person to be summoned

by the Officer making investigation must reside within the limits of his

own police station or within the adjoining area, secondly, that in the case

of a male person under the age of fifteen years or woman, their attendance

could not be enforced at any place other than their place even if they reside

within the limits of the police station of the police officer making the

investigation or within the limits of the adjoining police station and thirdly,

with reasonable expenses of every person other than a male person under

the age of fifteen years or woman attending such requisition at any place

within the limits of the police station of the officer making the

investigation or the adjoining police station should have to be paid by the

concerned police officer as per the Rules framed by the State Government

in this behalf.

30. But, however, there is no dispute with regard to principle stated

under Section 160 Cr.P.C. But, whether the same was applicable to the

Customs Act or not is the issue before hand.

Dr.GRR,J

31. The judgment of the Hon'ble Apex Court in Ashok Munilal

Jain and another v. Assistant Director, Directorate of Enforcement11

relied on by the learned counsel for the petitioners is with regard to the

applicability of Section 167 (2) Cr.P.C. to the cases arising out of PML

Act. The judgment of the Gauhati High Court in Niloy Dutta v. District

Magistrate, Sibsagar District and others12, relied on by the learned

counsel for the petitioners is with regard to the applicability of proviso to

Section 160 (1) Cr.P.C., to the exercise of power by the Army Authority

under the Central Act 28 of 1958. The above judgments are considered not

applicable to the facts and issue in the present case.

32. Whenever a statute creates a new offence and also sets up a

machinery for dealing with it, the provisions of Cr.P.C. relating to the

matters covered by such Statute would not be applicable to the said

offences. The Customs Act was enacted in 1962 and had created the

offences under Chapter-XVI and the manner of enquiry and investigation

are prescribed in Chapter-XIII. The Customs Act is enforced only by the

Customs Officers by its own machinery. The Customs Officers are

empowered with the power of investigation as contemplated under

Chapter-XIII of the Customs Act, 1962. The Customs Officer is not a

(2018) 16 SCC 158

1991 SCC OnLine Gau 37 Dr.GRR,J

police officer as per the judgment of the Hon'ble Apex Court in Barkat

Ram's case (4 supra) and the statement made before him by a person who

is arrested or against whom an enquiry is made are not covered by Section

25 of the Indian Evidence Act.

33. In the judgment of the Hon'ble Apex Court in K.I. Pavunny v.

Assistant Collector (Head Quarter), Central Excise Collectorate13, it

was held that:

"It would thus be clear that the object of the Act empowering Customs Officers to record the evidence under Section 108 is to collect information of the contravention of the provisions of the Act or concealment of the contraband or avoidance of the duty of excise so as to enable them to collect the evidence of the proof of contravention of the provisions of the Act so as to take proceedings for further action of confiscation of the contraband or imposition of the penalty under the Act etc. By virtue of authority of law, the officer exercising the powers under the Act is an authority within the meaning of Section 24 of Evidence Act.

[1] Though the authority/officer on suspecting a person of having committed the crime under the Act can record his statement, such a person per force is not a person accused under the Act. [2] he becomes accused of the offence under the Act only when a complaint is laid by the competent customs officer in the court of competent jurisdiction or magistrate to take cognizance of the offence and summons are issued. Thereafter, he becomes a person accused of the offence. [3] A statement recorded or given by the person suspected of having committed an offence during the inquiry under Section 108 of the Act or during confiscation proceedings is not a person accused of the offence within the meaning of Section 24 of the Evidence Act. [4] Though the Customs Officer is an authority within the meaning of Section 24 of the Evidence Act, by reason of statutory compulsion of recording the statement or the accused

(SC)-1997-2-1972 Dr.GRR,J

giving voluntary statement pursuant to his appearing either after issuance of summons or after the appellant's surrender, such statement cannot be characterised to have been obtained by threat, inducement or promise. [5] The collection of evidence under Section 108 and other relevant provisions relating to search and seizure are only for the purpose of taking further steps for confiscation of contraband and imposition of penalty. [6] The self-same evidence is admissible in evidence on the complaint laid by the Customs Officer for prosecution under Section 135 or other relevant statutes."

34. Considering the legal position and the object of the enactment

of the Customs Act and the judgments of the Hon'ble Apex Court

extracted above, it is considered that the provisions of Section 160 Cr.P.C.

are not applicable to Section 108 of the Customs Act, 1962.

35. The judgment relied on by the learned counsel for the

petitioners in Hanumanthaiah G.'s case (2 supra) is with regard to

challenging the summons issued by the respondent therein under Section

50 of the PML Act, wherein they were directed to join the enquiry through

video conferencing. As this aspect is raised by the petitioners in WP (Crl)

No.329 of 2020 and the same is pending before the Hon'ble Supreme

Court, this Court does not intend to make any observations on it.

36. As summoning of the petitioners by the respondents would not