Customs, Excise and Gold Tribunal - Tamil Nadu
D. Uttam Chand vs Collector Of Central Excise on 14 July, 1994
Equivalent citations: 1995(79)ELT588(TRI-CHENNAI)
ORDER S. Kalyanam, Member (J)
1. The above appeals are directed against the order of the Additional Collector of Customs, Madurai dated 11-2- 1991 absolutely confiscating Indian currency of Rs. 20 lakhs under Section 121 of the Customs Act, 1962, the 'Act' for short, besides penalty of Rs. 4 lakhs on appellant Uttam Chand, Rs. 3.5 lakhs on appellant Selvaraj and Rs. 2.5 lakhs on appellant Kannan under Section 112(b) of the Act.
2. On prior information, the Preventive Officers attached to Head- quarters (Preventive), Madurai, visited the lorry booking office of M/s. Ganesh & Co. situated at Palace Road, Madurai and searched the premises, recovered two cardboard boxes marked for onward despatch to one "Mattukutty Calicut". On opening the boxes the authorities found 10 bundles of Indian currency wrapped in newspaper, each of the value of Rs. 1 lakh, in addition to some bangles and other fancy items and in another cardboard box the authorities found another 10 bundles of Indian currency of each Rs. 1 lakh wrapped in newspaper alongwith bangles and fancy items. Appellant Uttam Chand admitted the ownership of the two cardboard boxes containing the Indian currency in question. Since the Indian currencies were being sent without cover of bills or documents and kept concealed with fancy items, the authorities effected detention of the same under a Detention Mahazar on a reasonable belief that the currency represented sale proceeds of contraband gold. Appellant Uttam Chand told the authorities that at the request of one M.A. Mattukutty of Calicut he despatched the currency in the cardboard boxes along with the fancy articles and did not give bill or any documents for the same. To a query from the authorities Uttam Chand did not tell anything further. The detention mahazar was prepared by the authorities for seizure of the currency on 31-8-1988 at about 5.30 PM. On 3-9-1988, Shri Uttam Chand gave an inculpatory statement and admitted the booking of the parcel at Madurai lorry office, containing the currency in question to Calicut and also admitted to having despatched similar consignments earlier. He further stated that he was doing business in the name and style of "Madan Trading Co.," and came into contact with one Rasheed of Keelakarai, who asked him to send the money given by Selvaraj of Madurai to Calicut and gave the telephone number of one Razack Bai of Calicut. Accordingly Selvaraj gave Rs. 5-6 lakhs in the first and second week of August 1988. He further stated that sometime the delivery of parcels was obtained from M/s. Inter State Lorry Service at Calicut and he has a shop at Calicut with Shri Mustafa as his partner under the name "Maruthi Fancy Company". On 31-8-1988 the customs authorities searched the premises of Madan Trading Company and recovered some telephone numbers of Calicut parties and likewise the search on 1-9-1988 by the officers at Calicut in the premises of Maruthi Fancy Company resulted in the recovery of four empty cartons bearing the name "Mattukutty".
3. Statement was recorded from Shri Selvaraj on 3-9-1988 in which he corroborated the statement of Uttam Chand and further stated that at the instance of one Gaffoor of Keelakarai he was sending sale proceeds of contraband gold through Uttam Chand and the currency under seizure was sent by him through his brother Kannan and handed over to one Ramesh, brother of Uttam Chand. Appellant Selvaraj further stated that on 26-8-1988 morning the said Gaffoor visited his house and gave him 53 nos. of gold biscuits with foreign markings which he disposed of viz. 31 nos. to one Baskaran of Madurai on 27/28-8-1988 through his brother Kannan and 6 gold biscuits to one Purushothaman and 16 nos. to one Loganathan of Madurai, on 26-8-1988.
4. Statement of appellant Kannan made on 3-9-1988 corroborated the statement of his brother Selvaraj. Farook of Calicut was also examined by the authorities and he stated that he was also known as Razak Bhai. Statements were also recorded from other persons like Aboobaker, Mustafa, Suresh etc. After the completion of the investigation, proceedings initiated ultimately culminated in the present impugned order.
5. Shri Kareem, the learned Senior Counsel for appellant Uttam Chand, contended that the currency belonged to Uttam Chand and the inculpatory statement belatedly was recorded from him after subjecting Uttam Chand to illegal detention and by coercion by ill-treating him and causing him injuries. Similar statements were also extracted from persons like Selvaraj, Kannan, Gaffoor and others. The statements of Uttam Chand and others are not voluntary and true and were brought out under the circumstances of threat and coercion by keeping the persons in illegal detention. Uttam Chand was detained till 9.00 PM at the lorry shed on 31-8-1988 and then taken to the Customs office and kept in illegal custody. Shri Veerabadran, Advocate, who was engaged to get the release of Uttam Chand, in his cross-examination submitted that when he went to the Customs office he saw Uttam Chand and his brother Ramesh Kumar with their faces swollen and marks of beatings were visible on their bodies and he was prevented from meeting them. Farook has also stated that he was taken to Madurai by Calicut Customs officers and reached Madurai on 2-9-1988 evening and he was also compelled to give a statement against his own volition. It was urged that Uttam Chand's father sent a telegram on 2-9-1988 to the Collector of Customs, Trichy, alleging illegal detention of his son since 31-8-1988 and torture by officers for extracting confessions. Uttam Chand also sent a telegram on 5-9-1988 to the Collector of Customs, Trichy, which reads as under :
MADURAI CENTRAL EXCISE PREVENTIVE OFFICIALS ILLEGALLY AND FORCIBLY TOOK ME TO THEIR OFFICE 31-8-88 EVENING AND DETAINED ME UNTIL 4-9-88 NIGHT HOURS WHEN I WAS RELEASED ON BAIL. DURING DETENTION I WAS SEVERELY BEATEN DAY AND NIGHT WITH RULERS LATHIS AND STEEL RODS. NO MEDICAL TREATMENT GIVEN TO ME. I WAS FORCED TO WRITE IN MY OWN HAND INCRIMINATING STATEMENT ACCORDING TO THEIR DICTATION THREE PAGES ON 2-9-88 THREE PAGES ON 4-9-88 MY FATHER DURGACHAND SENT TELEGRAM COMPLAINING ILL TREATMENT TO YOU AND COLLECTOR MADURAI ON 2-9-88 OFFICERS OBTAINED BY COMPULSION RETRACTION OF TELEGRAM FROM MY FATHER OFFICERS TAPE RECORDED QUESTIONS AND REPLIES REPEATED FROM ALREADY PREPARED WRITTEN STATEMENTS ON 4-9-88 STATEMENTS NOT ADMISSIBLE AND ABSOLUTELY VOID I NEVER COMMITTED SMUGGLING OR SOLD GOLD THE SUM OF RUPEES TWENTY LAKHS BELONG TO ME ABSOLUTELY PLEASE RETURN THE SAID SUM WITHIN THREE DAYS OTHERWISE TAKING LEGAL PROCEEDINGS FOR RECOVERY OF TWENTY LAKHS.
Appellant Uttam Chand further sent a telegram on 14-9-1988 to the Collector. Uttam Chand's father also sent telegrams to the Secretary, Ministry of Finance, Addl. Chief Judicial Magistrate, Madurai, about the illegal custody of his sons. No statement was recorded from appellant Uttam Chand from 31-8-1988 to 3-9-1988 and this only shows that his client was not willing to give any inculpatory statement. The learned Counsel assailed the plea of the Department about the preparation of the detention mahazar. When the currency had been seized on a reasonable presumption, there is no question of detaining the same and what has been practically done is only effective seizure and so the statement should have been recorded immediately by the authorities. No gold was seized from any one and even if the Indian currency is not satisfactorily accounted for, that would not call for either seizure or confiscation under Section 121 of the Act. Even though the gold was allegedly sold to three persons in Madurai as per the statement of Selvaraj, those three persons were never contacted nor their statement recorded nor any gold recovered. This is a serious lacuna in the investigation. According to Selvaraj the gold supplier was one Gaffoor of Keelakarai, whereas according to Uttam Chand the supplier of gold was one Rasheed and those persons were also not examined by the Department. No summons were issued to the three purchasers of gold, viz. Bhaskaran, Purushothaman and Loganathan. Shri Chandrasekharan, Supdt. of Customs, was cross-examined by Advocate on 2-3-1990, who admitted that Selvaraj and Kannan were not in his office from 1-9-1988 to 4-9-1988. The learned Counsel referred to the cross-examination in support of the plea of illegal detention and custody of Uttam Chand and others for the purpose of extracting the statement.
6. Shri Thyagarajan, the learned Counsel appearing for appellant Selvaraj and Kannan, submitted that the inculpatory statements are not voluntary and true and were brought out when they were in illegal detention from 1-9-1988 to 4-9-1988. They were not produced before the judicial Magistrate and in a case of this magnitude the department would not arrest a person and just release him on bail and they were deliberately not produced before the Magistrate because they were in illegal custody for more than three days and were beaten up. The learned Counsel further submitted that Uttam Chand was interrogated and his answers were recorded in the mahazar and in the answers Uttam Chand did not mention the name of Selvaraj and Kannan and their names were mentioned only in his statement of 3-9-1988, long after the seizure, under the detention mahazar. Even though according to the Department Farook was brought to Madurai on 1-9-1988 evening there is absolutely no explanation as to why his statement was not recorded. This would also indicate that he was not willing to give any statement. The learned Counsel further submitted that according to Selvaraj one Gaffoor of Keelakarai gave the gold biscuits, whereas according to Uttam Chand one Rasheed of Keelakarai sent the gold and there is no explanation at all for this vital contradiction. Likewise, according to Selvaraj money was sent through Uttam Chand to one Razack of Calicut whereas Uttam Chand would refer to one Farook of Calicut. The learned Counsel also urged that no incriminatory materials were seized from his clients' residence, neither any gold, nor any receipts nor any slips. It was further contended that the burden is on the Department to prove that the currency in question is the resultant of sale of contraband gold and clearly relatable to the same and in the absence of any positive link between the currency and the sale of contraband gold the benefit of doubt should be in favour of the appellant.
7. Shri Jeyaseelan, the learned D.R. contended that the currency in question was packed in bundles and there was no way-bill. The currency was only detained on 31-8-1988. Four telephone numbers were recovered by the officers from Madan Trading Company of Uttam Chand and the telephone numbers, viz, 61137 and 66359 relate to one Farook of Calicut and two other numbers related to Interstate Lorry Service at Calicut. Even at the time of preparation of Mahazar, Selvaraj admitted that the currency represented sale proceeds of contraband gold and the gold was given to him by one Gaffoor who was from Keelakarai. Farook and Razack in thier statements submitted that the gold was sent by Rasheed and Sali of Dubai to Gaffoor of Keelakarai. The learned D.R referred to the statements of Shri Subbaiah, the person in charge of lorry shed, dated 31-8-1988 and 2-9-1988 and urged that Subbaiah admitted in both the statements that Uttam Chand sent the packages. Selvaraj also gave a statement on 3-9-1988 and he is an important link in the case and a previous offender fined by Belgaum Collectorate. According to him he sent the sale proceeds of contraband gold to Uttam Chand for despatch. Selvaraj has also narrated in his statement about his prior transactions through Uttam Chand. It was urged that 53 gold biscuits, as per the statement of Selvaraj were given by the said Gaffoor at Selvaraj's house at Madurai, which he sold to three persons, viz. Bhaskaran, Purushothaman and Loganathan and even though the authorities searched the premises of those persons on 2-9-1988 nobody was present. The inculpatory statement of Selvaraj has been corroborated by the statement of Kannan, his brother, on 3-9-1988 and Kannan has also explained how the money was given to Rameshkumar, brother of Uttam Chand and how he also helped him in packing the currency. Farook had also given an inculpatory statement on 3-9-1988 and the same was retracted only on 14-9-1988. The learned D.R. also referred to the belated retraction of the statement of Uttam Chand. The learned D.R. after making elaborate submissions on the evidence on record, placed reliance on the Division Bench Ruling of the Madras High Court in the case of Anilji Merchant v. DRI, reported in 1985 (20) E.L.T. 292 and also the case of Vittal Nathan v. Collector of Central Excise, reported in 1989 (42)E.L.T. 523. The learned D.R. also referred to the Division Bench ruling of Madras High Court in the case of Tulasi Ammal v. G.O.I. reported in 1987 (30) E.L.T. 415. Finally the learned D.R. concluded by saying that Uttam Chand had initially disowned the currency and also did not produce any evidence regarding his ownership and, therefore, the currency would be liable for absolute confiscation. A reference was also made to the ruling of this Bench in the case of Panduranga Bhagwan Patel v. Collector of Central Excise, Madurai, reported in 1987 (27) E.L.T. 713.
8. In reply Shri Nazeer, the learned Counsel for appellant Uttam Chand, submitted that inculpatory statements were retracted and would not be of any avail and on 27-9-1988 writ petitions were filed by Selvaraj, Farook and Uttam Chand in the Madras High Court and orders were passed initially on 27-9-1988 by the High Court directing that the Department should not place reliance on the inculpatory statement of those persons who have filed the writ petitions and this order was also confirmed by another learned High Court Judge by order dated 7-2-1989 which fact has been admitted by the Department in the show cause notice as well as in the order and excluding the inculpatory statement the case of the Department is bound to fail.
9. We have carefully considered the submissions made before us. The primary question that would arise for our consideration in the present case is whether there is evidence on the side of the Department to prove that the currency under seizure and under absolute confiscation in terms of impugned order is proved and established by evidence on record as representing sale proceeds of contraband gold. The seizure of the currency on 31-8-1988 is not disputed and is indeed admitted. On going through the mahazar, we find that by reason of the fact that there was no way-bill for the currency in question and they were kept concealed along with fancy goods in two cardboard boxes, the Department entertained a reasonable belief that they represented sale proceeds of contraband gold and effected seizure. It is indeed surprising that the Department chose to call it a detention mahazar and not a seizure mahazar and why this has been resorted to is a matter that remains unexplained till date. Appellant Uttam Chand sent the cardboard boxes, which fact he admitted before the authority. On 31-8-1988 Uttam Chand was very much available before the authorities and in such a situation one would normally expect the authorities to record the statement of Uttam Chand immediately then and there, particularly when a substantial quantity of currency in the above circumstances had been rightly seized by the authorities. But unfortunately no statement from Uttam Chand was recorded at all on 31-8-1988. To a pointed query as to whether Uttam Chand was detained by the Customs authorities till he was released on bail on 4-9-1988, the learned D.R. merely stated that "he was allowed to go and come". We find that statement from Uttam Chand was recorded only on 3-9-1988 and despite our best endeavours we are not able to get any reason as to why the statement was not immediately recorded from Uttam Chand. If Uttam Chand had been a willing party to give a statement of his own it does not stand to reason as to why no such statement was recorded from him till 2-9-1988. We were not shown any copy of the statement recorded by the officers from Uttam Chand on 2-9-1988. After completion of the hearing on 5-7-1994 the learned D.R. submitted that since elaborate references have been made to various statements, he would submit a typed set of copies for reference, within a week, but no such typed set has been received by the Registry till date. The statement of Uttam Chand, Selvaraj, Kannan and Gaffoor are indeed inculpatory and if they are held to be voluntary the charge of the department would stand established. But unfortunately the circumstances under which the statements were recorded belatedly and in the absence of any convincing explanation for the delay in recording the statements earlier in respect of the seizure or detention of currency coupled with the telegram sent by Uttam Chand's father to the Collector of Customs and other authorities alleging illegal detention and torture of Uttam Chand by the authorities since 31-8-1988 and also having regard to the statement of Advocate Veerabadran that he saw injuries on the person of Uttam Chand and his brother when they were under the custody of the Customs authorities, we are constrained to address ourselves to the primary question as to whether the statements could be voluntary at all. In this context we would refer to the batch of writ petitions filed by Uttam Chand, Selvaraj, Farook in the High Court of Madras in Sept. 1988 wherein inter alia they mainly prayed for an order of injunction to restrain the Department from making use of the statements recorded from them when they were allegedly kept in custody from 31-8-1988 to 4-9-1988 in connection with the seizure of the currency in question. Uttam Chand in his affidavit sworn before the High Court has stated as under :
"On 31-8-1988 at 10 A.M. I received a phone call from Sri Ganesh & Co. Lorry Service Office, Madurai and I found a dozen Customs Officers who asked me about two parcels I sent to the Lorry Office, the previous day containing Indian currency notes for Rs. 20 lakhs. I sent the same to Calicut for purpose of purchasing a Lodging House. The officers opened the cartons seized the Indian currency illegally without any authority of law. I am entitled to deal, possess, transfer within India, Indian currency notes and the Customs authorities have no power at all to seize the same and deprive me of their possession causing serious danger to my lawful purchase of Lodging House at Calicut.
The Officers detained me in Lorry Office until 9 PM and in the meanwhile they beat me and Lorry Office employees indiscriminately and brutally I was forcibly taken to their office at 9 PM. Not a drop of water or food was given to me because they wanted me to and I refused to, admit that they are sale proceeds of smuggled gold, Mahazar copy of seizure was not given to me. Throughout the night no sleep until between 3 AM and 5 AM next day on 1-9-1988. In the night they gave me a cup of coffee after I accepted their story of smuggling and selling gold because I could not stand the torture of a dozen officers, peons, sepoys etc. of the office with lathis, rulers and steel rods. After severe maltreatment destroying all my self respect and free will, they began to dictate statements on 2-9-1988.I was compelled to write in Hindi their own stories of sale of gold, I wrote 3 pages next day. 3 pages on 3-9-1988 and another 2 pages on 4-9-1988. I was kept in their lock up all the time from 31-8-1988 to 4-9-1988 for five days. At about 9 P.M. on 4-9-1988 they released me on bail on the condition that I should appear daily on all the working days, till 9-9-1988 and from 12-9-88 Monday thrice a week.
5. They engaged their own lawyer by name Kathiresan and prevented the appearance of my Advocate Mr. Veerbhadran. He was not allowed to enter into the office. Mr. Kathiresan was not at all interested in protecting me and defending my rights and he did everything in collusion with the officers. He noted as a de facto department Advocate. I was wholly in the custody of the officers, locked up in their room.
6. I was [not] taken to any Magistrate at all, though Article 22 (2) of the Constitution is mandatory.
7. My father Durgajee who had come from Rajasthan sent telegram on 2-9-1988 to the Collector of Customs and Central Excise, Madurai and Madras and to the Home Minister Buta Singh complaining about my illegal custody and my ill-treatment by the officers. Before releasing me on bail on 4-9-1988 they compelled my father to withdraw in writing the accusation and complaint in his telegram. Then only they released me on bail.
8. On 2-9-1988 the 1st respondent's officers showed me a person whom I did not know and compelled me to identify him as the person [with] whom I had gold dealings and also to admit that I had gold dealings with him. The sum of Rs. 20 lakhs belongs to me and it had nothing to do with any contraband goods and it is not the sale proceeds of gold. I am absolutely innocent. The only Department which has jurisdiction is the Income Tax Department which may conduct enquiry.
9. The whole conduct of the officials of the respondents Nos. 1 and 2 is absolutely high-handed, brutal and illegal for the following reasons :-
(a) (i) The officers have no jurisdiction to keep me locked up in their office room for 5 days.
(b) (ii) The officers had acted illegally in not following the law and the procedures laid down and thereby violated Articles 21, 22(1) and (2), 19(1)(g) and 14 of the Constitution.
(iii) The officers turned worse than beasts denying me good sleep, medical assistance while indulging in all kinds of assault physically, mentally, day and night for hours on end. My neck and legs back were swollen and I could not stand or walk. The officers mercilessly attacked madly. The statements were all cooked up story to justify seizure of the money.
(c) The Officers searched my premises and found nothing incriminating and they became furious over their failure to get any illegal thing so that they can use it against me.
(d) They spent their exasperation on me by numerous blows.
(e_) There was 'no reason to believe' that I had violated the Customs Act. Therefore the seizure is illegal.
(f) The statements are false and illegal and therefore the statements cannot be used for any purpose. Even otherwise Section 138-B is a bar to the use of such statements."
9A. Appellant Selvaraj has also sworn an affidavit before the High Court as under:
"I submit that on 1-9-1988 at about 10 A.M the 1st respondent's officer, Preventive Inspector Sri Gopal along with other officers came to my office and was examining my brother Mr. Kannan. At that time I reached my office. During the Customs Officers search nothing incriminating was seized or found. Then they forcibly took me to their office by 3 PM. They locked me in their office and threatened me with serious consequences if I did not write a statement according to their dictation. Even though I resisted it did not last for long. They took my statement for four days. They did not provide me any basic amenities. I was kept in their lock-up for four days without proper food and sleep. The officers acted in an unreasonable and brutal manner and harassed me to submit to their command. The officers did not give me the copies of my statements obtained under compulsion in my own hand-writing incriminating me in the involvement of the seizure of Rs. 20 lakhs seized from a lorry office which is alleged to have been the sale proceeds of gold. This conduct of the officers would prove that they are not sure about their allegations and the non-supply of my statement is to alter it subsequently if necessary to suit their case.
4. I was released on bail by the Customs officers on 4-9-1988 at 8.00 PM. The Customs officers themselves engaged their Advocate friend Mr. Kathiresan to release me on bail. They did not permit me to contact my family members and friends and my Advocate. Mr. Kathiresan Advocate was not at all interested in protecting my rights and has not defended me properly. The Customs Officers did not inform my family members about my whereabouts. Further they did not inform my right to have legal assistance after arrest and before arrest. I was not taken to any Magistrate at all."
Similar were the averments in the affidavits of the other persons relating to their detention, ill-treatment and coercion practices subjected to them while extracting their statement. The Madras High Court while disposing of the writ petitions filed by appellants Uttam Chand, Selvaraj and others, passed the following order on 27-9-1988 :
"Following the interim order passed in W.A. Nos. 891 to 393/88, the respondents are directed not to take any action on the basis of the statements said to have been recorded from the petitioners, the validity of which is now being questioned before this Court. But, this will not deter the authorities from taking action oh any material other than the said statements recorded from the petitioners".
This would prima facie indicate that the High Court having gone into the various averments in the affidavits and on consideration of the facts and circumstances should have thought it fit to grant the extraordinary order of injunction interdicting the Department not to take any action on the writ petitioners on the basis of their inculpatory statements. Again, the High Court, after hearing both sides and on consideration of the entire records and the counter affidavits filed by the Department, passed order in the writ proceedings on 27-9-1989 which is as under :
"The petitioner in W.M.P. Nos. 2329/89, 2330, and 2331/89 is permitted to issue the show cause notice to the first respondent in each of his petition under Section 124 of the Customs Act, subject to the order passed by this court on 27-9-1988".
This would clearly show that another learned Judge of the High Court at a later point of time, after about 4 1/2 months of the earlier order, confirmed the earlier order of the High Court. The above circumstances would clearly indicate prima facie two learned Judges of the Hon'ble High Court were not satisfied about the voluntary nature of the statements and no other conclusion is possible in the above admitted facts. It would be relevant to note here that during the existence of the aforesaid orders of the High Court a show cause notice was issued by the Department on 8-2-1989 and, therefore, obviously the Department chose to initiate proceedings so far as the present appellants are concerned, de hors their statements, in the light of the two orders of the High Court. The learned adjudicating authority also in para 7.3 of the impugned order has referred to the writ petitions and the counter-affidavits filed by the Department and also the first order of the High Court dated 27-9-1988, directing the Department not to take any action on the basis of the statements recorded from the said persons. The learned adjudicating authority has also referred to the writ petitions filed by the Department and the order of the High Court dated 7-2-1989, referred to supra, permitting the department to issue show cause notice to Uttam Chand and others under Section 124 of the Customs Act, 1962 subject to the order passed by the Court on 27-9-1988. The learned adjudicating authority has made it clear in para 7.3 of his order that the statements of Uttam Chand, Selvaraj and S.L. Farook were relied upon as evidence in issuing the show cause notice along with number of other documents and barring the said three persons none of the other noticees had obtained any order restraining the Department from relying on any documents and that therefore the statement of Uttam Chand and others were relied upon in issuing the show cause notice to the other noticees. It would be better to extract in verbatim the findings of the adjudicating authority in this regard :
"Barring the said three persons none of the other noticees had obtained any order restraining the Department from relying any documents. Therefore, the statements of Uttam Chand, Selvaraj and S.L. Farook were relied upon in issuing show cause notice to other noticees. Moreover, the order dated 27-9-1988 of the High Court is very clear directing the Department not to take any action on the basis of the statements (said to have been) recorded from the said three persons."
9B. It is, therefore, evident that the adjudicating authority put a restraint on himself as it were by reason of the two High Court orders by proposing not to place any reliance so far as appellants Uttam Chand and Selvaraj are concerned in issuing show cause notice. We would like to note that S.L. Farook is not an appellant before us. Though the writ petitions alongwith other batch of writ petitions were ultimately disposed of by the Division Bench of the Madras High Court, dismissing the batch of writ petitions, the High Court did not take the view that the statements would be admissible. In other words the Division Bench while considering the writ petitions along with batch of other writ petitions, referring to various other issues with reference to the validity of the COFEPOSA and the order under FERA etc., took the view that since the Writ Court cannot go into the facts and since alternative remedy was available to the parties they should pursue their relief before the proper alternate forum. Subsequent to the above order of the High Court, the Department did not issue any show cause notice expressly putting appellants Uttam Chand and Selvaraj, who were the writ petitioners, on notice and indicating that the Department would rely on their statements and calling upon them to put forth their defence. When the learned D.R. was confronted with this position, he merely stated that inasmuch as they had traversed their own statements in their reply, no prejudice has been caused to them and by virtue of the dismissal of the writ petitions the Department would become entitled to rely on their statements. We are afraid, this plea of the learned D.R. cannot be accepted in the context of the peculiar facts and circumstances of this case set out above.
10. It is now well settled that, if the statements are found not to be voluntary, the further question of placing reliance on them, even if they are true, would hardly arise. Indeed, a statement which is inculpatory in nature and confessional in character voluntarily and truthfully made is indeed an efficacious proof of guilt. But, it is equally well settled that before the confession is accepted and acted upon the same should satisfy a double test, viz.
(1) whether the confession was perfectly voluntary;
(ii) if so whether it is true and trustworthy.
Satisfaction of the first test is the sine qua non for its admissibility for evidence. If the inculpatory or confessional statement appears to have been caused by any inducement, threat or promise coming within the broad principles enshrined in Section 24 of the Evidence Act, the same must be excluded and rejected brevi manu. In such a case the question of proceeding further to apply the second test does not arise, if the first test is not satisfied. The Court or the quasi-judicial authority must, before acting upon a confessional statement, reach the finding that what is stated in the statement is true and reliable. For judging the reliability of such a confession or for that matter any substantive piece of evidence there is no rigid canon of universal application. The facts and circumstances of each case will have to be carefully scrutinised and the evidentiary value of such statements in such situation will have to be evaluated in accordance with well accepted principles.
11. We may also refer to the cross-examination of Shri Govindarajulu, Supdt, on 25-3-1990 wherein he has made the following admissions :
'Q. Rs. 20 lakhs of currencies seized are not sale proceeds of 53 gold biscuits. Do you agree with this ?
A. It is not correct to say that the seizure of Rs. 20 lakhs of currencies does not represent the sale proceeds of 53 foreign gold biscuits. But it was made so for the purpose of concoction of the case to bring home under Section 121 of the Customs Act."
We are still at a loss to understand as to under what circumstances this admission of the Supdt. of Customs was made in cross-examination and this forms part of the record of personal hearing. It would be relevant to note that on the basis of the above admission, a writ petition was filed for quashing all the proceedings and the same was also admitted and eventually it came to be dismissed on 12-3-1993 on the ground that pending disposal of the writ petition adjudication order itself has been passed and the currency has been confiscated and it is for the petitioner to challenge the adjudication order and the writ petition has become infructuous.
Shri Chandrasekharan, Supdt. in his cross examination dated 2-3-1990 has stated that Uttam Chand, Selvaraj and Kannan were not in his office from 1-9-1988 to 4-9-1988 till they were released on bail and were brought by the Inspectors as and when they were required. Various answers given by the two Inspectors which form part of the record of personal hearing create considerable doubt in our mind as to whether the appellants were free persons at all moving about on their own volition or were under de facto detention with complete official surveillance on them. In the present case from 31st August, 1988 onwards, admittedly appellant Uttam Chand was available to the authorities. It is indeed surprising that no statement was recorded from him either on 31st Aug. or 1st or for that matter on 2nd Sept. 1988. The statement came into existence only on a later point of time. This inordinate delay is only consistent with a situation where Uttam Chand or the other persons were not willing to make a statement. The Department has no satisfactory explanation in this regard. The factual background in which the statements were recorded from Uttam Chand and others disturbs our judicial conscience and it does not inspire confidence in our mind that the statement could have been given voluntarily.
12. It is indeed strange and ironical that one N. Kathiresan, an Advocate, allegedly planted by the Department on the appellant while purporting to take action for securing the release of Uttam Chand, Selvaraj and others on bail should give a letter retracting the telegram of Uttam Chand's father and further committing himself that "I understand that Shri Durgaji, father of Shri D. Uttam Chand has sent one telegram dated 2-9-1988 alleging that his son is asked to give statement under threats. Today, after meeting my clients namely Shri Uttam Chand and R. Selvaraj, I find that statements recorded by officers were voluntary and true to their knowledge. It appears that the telegram sent was based on some misunderstanding and I and my clients along with Shri Durgaji reaffirm here that the statements recorded are voluntary and not under coercion. No physical harm has been done to my clients." We are indeed surprised at this kind of letter by a Advocate which is artificial, unsustainable, besides being not relevant to the purpose for which he was allegedly engaged. It is indeed curious that an Advocate, who arranges to secure the arrested person on bail, should commit himself in writing that the statements recorded by the authorities were voluntary and true. How such a statement at all could be made by an Advocate is a matter that passes our comprehension. Introduction of this piece of evidence is strikingly tell-tale, artificial in the extreme, very unlikely in common practice and certainly cannot be commended as a service of an Advocate to a client. We find it difficult to disabuse of our mind an impression that this piece of evidence was deliberately introduced to get over the plea of coercion, force and undue influence alleged by the appellants in the matter of recording their statements by the authorities. The less said about the letter of the Advocate the better in the context of the case.
13. We have also gone through the medical certificate issued by Dr. V. Murugan to the effect that he examined Uttam Chand on 5-9-1988 and found on his person bruise on the right leg and also mild to moderate haematoma. Telegrams sent by Uttam Chand's father alleging ill-treatment to various authorities would assume considerable importance in the present context in addition to the testimony of the Advocate Shri Veerabadran. We are not able to accept the plea of the Department that after all Uttam Chand was willing and playable to attend the Customs office as and when directed and eventually had to be served with summons. Serving of summons also is rendered totally meaningless in the admitted context of this case.
14. At this juncture we would like to refer to the judgment of this Bench in the case of K.L. Pavunni v. Collector of Customs and Central Excise, Cochin, reported in 1985 (22) E.L.T. 913 wherein the Bench has observed as under :
"Such a confessional statement would lose all its value and worth if the same is proved to have been brought into existence after the appellant was detained de facto for a considerable length of time in Customs Office even if it was in the handwriting of the appellant and contained factual details which could not be characterised as the figment of the officer's imagination. The appellant's explanation that he could retract from his confessional statement only on 15-12- 1980, because of the continuing threat that his wife too would be examined otherwise whereas she was in fact examined on 12-12-1980, appears plausible and as such acceptable, Indeed the various judicial pronouncements have condemned in strongest terms such de facto detention for a long spell of hours by authorities under the guise of interrogation, eroding the value of human liberty enshrined in Article 21 of the Constitution. It has, therefore, to be held that the confessional statement recorded from the appellant is not voluntary and does not merit acceptance."
The full Bench of the Madras High Court also in the case of Roshan Beevi and Ors. v. Joint Secretary to the Government of Tamil Nadu, Public Department (Law and Order) and Ors. reported in 1984 (15) E.L.T. 289 has held as under :
"If it is shown in a given case that such a confession was obtained by the Customs Officer by exertion of inducement, threat, coercion or duress or extracted by illegally detaining the person in an unauthorised prolonged custody in contravention of the provisions of the Customs Act, or obtained by using Third degree methods, then the question about the acceptability and reliability of such involuntary confessions would arise."
15. We have carefully gone through the various cases cited by the learned D.R. While respectfully agreeing with the ratio therein and not quarrelling with the proposition, we hold that they are not applicable to the facts of the present case and are clearly distinguishable. The circumstances under which appellant Uttam Chand was kept under the control of the Department unofficially for a long spell of time and the inculpatory statement emerging after the lapse of considerable time render the voluntary nature of the statement indeed suspect. We are indeed at a loss to understand as to how after the collection of so much material and after about 4-5 days, when Uttam Chand was arrested, why the Department chose to release him on bail which is very unusual and which is inconsistent with the practice of the Department in similar cases and in similar circumstances. To our repeated queries to the learned D.R., the learned D.R was not able to satisfy us. The proceedings being penal in nature we are constrained to give the benefit of the doubt in favour of the appellant arising in the facts and circumstances of the case. Therefore, on consideration of the entire evidence on records and for the reasons stated above we are inclined to hold that the inculpatory statement recorded from Uttam Chand and Selvaraj and Kannan, the appellants herein have not proved to be voluntary, more particularly when the adjudicating authority himself chose not to rely on the statements of Uttam Chand and Selvaraj against them in the proceedings as evidenced by his own finding extracted above. We, therefore, give the benefit of doubt in favour of the appellants present before us and exonerate them of the charges. We make it clear that we do not feel called upon to pronounce upon the ownership of the currency in question. It is an admitted fact that Uttam Chand despatched the boxes containing the currency and owned up the same even at the earliest stage of detention of the currency. The various averments in the writ affidavits also proclaim Uttam Chand's claim to the same. Irrespective of the ownership of the same inasmuch as the currency was in the possession of Uttam Chand we are constrained to hold that he would be entitled to the return of the same as the same cannot be confiscated on the ground that Uttam Chand had not proved his ownership as contended by the learned D.R and we hold accordingly. In the result by giving the appellants the benefit of doubt we exonerate the charges against them and allow their appeals as prayed for.