Gujarat High Court
Kaushikbhai Balubhai Bavarva vs State Of Gujarat & on 28 April, 2017
Author: J.B.Pardiwala
Bench: J.B.Pardiwala
R/SCR.A/1790/2017 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CRIMINAL APPLICATION (QUASHING) NO. 1790 of 2017
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KAUSHIKBHAI BALUBHAI BAVARVA, & 1....Applicant(s)
Versus
STATE OF GUJARAT & 1....Respondent(s)
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Appearance:
MR. P.M. THAKKAR, SENIOR ADVOCATE WITH MR CHETAN K PANDYA,
ADVOCATE for the Applicant(s) No. 1 - 2
CHINTAN H DAVE, ADVOCATE for the Respondent(s) No. 2
MS NISHA THAKORE, APP for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA
Date : 28/04/2017
ORAL ORDER
1. By this application under Article 227 of the Constitution of India, the applicants accused persons have prayed for the following reliefs: 40(a) To issue a writ of mandamus or a writ of certiorari or any other appropriate writ, order or direction, directing to quash and set aside an order dated 22/02/2017 passed in Criminal Revision Application No.111 of 2016 by the Hon'ble Sessions Court, Court No.8, Rajkot at AnnexureH.
(b) To issue a writ of mandamus or a writ of certiorari or any other appropriate writ, order or direction, directing to enlarge the petitioners on regular bail in connection with File No.DGCEI/RRU/15 01/201617 registered with Directorate General of Central Excise Intelligence, Rajkot Regional Unit, Rajkot.
(c) Pending admission, final hearing and disposal of this application, to stay implementation and operation of the order dated 22/02/2017 passed in Criminal Revision Application No.111 of 2016 by the Hon'ble Sessions Court, Court No.8, Rajkot at AnnexureH.
(d) To dispense with filing of certified copy of the arrest memo at Page 1 of 9 HC-NIC Page 1 of 9 Created On Mon Aug 14 05:10:53 IST 2017 R/SCR.A/1790/2017 ORDER AnnexureA and certified copy of the order dated 22/02/2017 passed in Criminal Revision Application No.111 of 2016 by the Hon'ble Sessions Court, Court No.8, Rajkot at AnnexureH and an order dated 23/02/2017 at AnnexureI as the same are produced in Criminal Miscellaneous Application No.6216 of 2017.
(e) To pass any other and further orders as may be deemed fit and proper in the interest of the petitioners.
(f) To provide for the cost of this petition.
2. The facts giving rise to this application may be summarized as under: 2.1 The applicants herein are engaged in the business of manufacturing of ceramic tiles. They are carrying on business in the name of M/s. Lexona Ceramic. M/s. Lexona Ceramic is a Partnership Firm and the two applicants herein are the Partners of the said Firm. On 03/03/2016, the Officials of the respondent no.2 undertook inspection of the factory premises. At the end of the search, the officials reached to the conclusion that the applicants herein had evaded the excise duty to the tune of Rs.3.57 crore.
2.2 The applicants herein were arrested by the officials and were produced before the learned Chief Judicial Magistrate, Rajkot with a production memo. The arrest memorandum dated 29/11/2016 is at Page15A, AnnexureA to this application. A part of the arrest memorandum so far as the accusation is concerned reads as under: (3) In view of the above, it is found that Shri Anilbhai Nanjibhai Surani Partner in M/s. Lexona Ceramic, PipliJetpur Road, Morbi is liable for punishment prescribed under S.9(1)(d) of the Central Excise Act, 1944 in as much as the Central Excise Duty evaded by them by way of act or omission and commission as described above. For the sake of clarity the provisions of S.9(1)(d)(i) of the Central Excise Act, 1944 are reproduced herein below:
Page 2 of 9HC-NIC Page 2 of 9 Created On Mon Aug 14 05:10:53 IST 2017 R/SCR.A/1790/2017 ORDER (1) Whoever commits any of the following offences, namely :
(d) attempts to commit, or abets the commission of, any of the offences mentioned in clauses (a) and (b) of this section;
shall be punishable,
(i) in the case of an offence relating to any excisable goods, the duty leviable thereon under this Act exceeds one lakh of rupees, 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 a term of less than six months;
(ii) in any other case, with imprisonment for a term which may extend to three years or with fine or with both."
(4) Further, the offence committed by Shri Anilbhai Nanjibhai Surani, Partner in M/s. Lexona Ceramic, PipliJetpar Road, Morbi is found to be cognizable and nonbailable in terms of S.9A(1A) of the Central Excise Act, 1944 because the offences committed by Shri Anilbhai Nanjibhai Surani is covered under S.9(1)(b) of the Central Excise Act, 1944. For the sake of clarity, the relevant provisions as detailed under S.9(1) of the Central Excise Act, 1944 is being reproduced herein below: "Whoever commits any of the following offences, namely :
(b) evades the payment of any duty payable under this Act; (bb) removes any excisable goods in contravention of any of the provisions of this Act or any rule made thereunder or in any way concerns himself with such removal;
(bbb) acquires possession of, or in any way concerns himself in transporting, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under this Act or any rule made thereunder;
(d) attempts to commit, or abets the commission of, any of the offences mentioned in clauses (a) and (b) of this section;
Further, S.9A[1A] of the Central Excise Act, 1944 reads as follows: "The offences relating to excisable goods where the duty leviable Page 3 of 9 HC-NIC Page 3 of 9 Created On Mon Aug 14 05:10:53 IST 2017 R/SCR.A/1790/2017 ORDER thereon under this Act exceeds Two Crores rupees and punishable under clause (b) or clause (bbbb) of the section (1) of section 9, shall be cognizable and nonbailable."
2.3 On the production of the two applicants herein before the Chief Judicial Magistrate, Rajkot, an application was filed seeking regular bail under Section439 of the Cr.P.C. The Chief Judicial Magistrate, Rajkot having regard to the fact that the offence is magistrate triable and the maximum punishment prescribed by the statute being seven years, though fit to exercise its discretion and ordered the release of the two applicants on bail.
2.4 The order passed by the learned Chief Judicial Magistrate is at Page50. The same is dated 30/11/2016. The Chief Judicial Magistrate, Rajkot released the two applicants on bail subject to certain terms and conditions. In para6 of the order passed by the learned Magistrate, it has been noted that the applicants had deposited Rs.50,00,000/ (Rupees Fifty Lac only) in the first on the date of the passing of the order and another Rs.25,00,000/ (Rupees Twenty Five Lac) was being deposited.
2.5 It appears from the materials on record that the department being dissatisfied with such order passed by the learned Chief Judicial Magistrate releasing the applicants on bail, preferred a Criminal Revision Application No.111 of 2016 and prayed for cancellation of the bail.
2.6 The Criminal Revision Application filed by the Department was entertained by the learned 8th Additional Sessions Judge, Rajkot and the Court concerned in exercise of its revisional jurisdiction allowed the revision application and ordered the bail granted by the learned Judicial Magistrate to be cancelled. Before the order Could take its effect, the Page 4 of 9 HC-NIC Page 4 of 9 Created On Mon Aug 14 05:10:53 IST 2017 R/SCR.A/1790/2017 ORDER applicants came before this Court by filing the present application.
3. On 06/03/2017 the following order was passed: Let Notice be issued to the respondents, returnable on 13/04/2017. Ms. Thakore, the learned Additional Public Prosecutor waives service of notice for and on behalf of the respondent no.1State of Gujarat. Direct service for respondent no.2.
Let there be an adinterim order in terms of Para40(c). Notify the matter on top of the board.
4. Thereafter on 20/04/2017 the following order was passed: Affidavit of Ram Singh Shekhawat S/o Shri Keshar Singh Shekhawat, aged 43 year, residing at Rajkot and working as Deputy Director, Directorate General of Cnetral Excise Intelligence, Regional Unit, Rajkot is taken on record.
Rule returnable on 28th April, 2017. Ms. Nisha Thakore, the learned Additional Public Prosecutor, waives service of notice of rule for and on behalf of the respondent No.1State. Mr. Chintan H. Dave, the learned advocate waives service of notice of rule for and on behalf of the respondent No.2.
Interim relief granted earlier to continue till the final disposal of this application.
5. Mr. P.M.Thakkar, the learned senior counsel assisted by Mr. Chetan Pandya, the learned counsel appearing for the applicants vehemently submitted that in the first place, the criminal revision was not maintainable. The Sessions Court could not have exercised its revisional jurisdiction for the purpose of cancelling the bail. The second submission of the learned senior counsel is that even otherwise there was no good reason for the Sessions Court to cancel the bail granted by the learned Magistrate. Mr. Thakkar pointed out that out of 3.57 crore, an amount of Rs.2.62 crore has already been deposited by the applicants with the Department. Mr. Thakkar further submits that the balance Page 5 of 9 HC-NIC Page 5 of 9 Created On Mon Aug 14 05:10:53 IST 2017 R/SCR.A/1790/2017 ORDER amount of about Rs.95 lac was also be deposited by his clients in equal monthly installment of Rs.10,00,000/ (Rupees Ten lac Only). According to Mr. Thakkar, the offence under Section9 of the Central Excise Act is a Magistrate triable offence and the maximum punishment that the Court can impose, if ultimately, the applicants are held to be guilty, is seven years.
6. On the other hand, Mr. Chintan Dave, the learned counsel appearing for the Department vehemently opposed this application and submitted that no error not to speak of any error of law could be said to have been committed by the revisional Court in passing the impugned order cancelling the bail of the two applicants. According to Mr. Dave, the case on hand is one of an economic offence. The excise duty to the tune of Rs.3.57 crore was found to have been evaded. Having regard to the nature of the crime, the learned Judicial Magistrate ought not to have exercised his discretion in favour of the applicants. In such circumstances, Mr. Dave submits that there being no merit in this application, the same be rejected.
7. Having heard the learned counsel appearing for the parties and having considered the materials on record, the only question that falls for my consideration is whether the revisional court committed any error in passing the impugned order.
8. The first submission of the learned senior counsel as regards the maintainability of the criminal revision application deserves to be sustained. The orders granting bail or refusing bail are interlocutory orders. While granting bail or even while rejecting the bail, the Court does not decide any final rights of the parties. Such type of the orders cannot be even termed as intermediate orders.
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R/SCR.A/1790/2017 ORDER
9. It has been observed by the Supreme Court in the case of Usmanbhai Dawoodbhai Memon v. State of Gujarat, (1988) 2 SCC 271, thus :
"It cannot be doubted that the grant or refusal of a bail application is essentially an interlocutory order. There is no finality to such an order for an application for bail can always be renewed from time to time.... There is no finality attached to an order of a Designated Court granting or refusing bail. Such application for bail can always be renewed from time to time. That being so, the contention advanced on behalf of the Government that the impugned orders refusing to grant bail were not interlocutory and therefore appealable cannot be accepted."
10. Relying on the above decision, the Bombay High Court in the case of Mohan alias Mannu Basantani v. State of Maharashtra, 1989 Mah. L.R. 1556 ruled as follows :
"The order granting or refusing bail is an interlocutory order and in view of subsection (2) of section 397 the revisional powers could not be exercised in respect of such interlocutory order."
11. Similarly, the Bombay High Court in the case of The State of Maharashtra v. Namdeo Raoji and others, (1991)1 Mah. L.R. 379, held that orders of bail are essentially interlocutory orders and the revision is barred under section397(2) of the Cr. P.C. The above decisions support the contentions that order granting or refusing bail is an interlocutory one and the reason is that the application for grant of bail can be renewed from time to time.
12. Thus, in the first instance, there was a inherent lack of jurisdiction on the part of the Sessions Court in entertaining the criminal revision application. If at all the Sessions Court wanted to cancel the bail, the Page 7 of 9 HC-NIC Page 7 of 9 Created On Mon Aug 14 05:10:53 IST 2017 R/SCR.A/1790/2017 ORDER same could have been in exercise of power under Section439(2) of the Cr.P.C. It can be argued that what difference would it make. If ultimately there is a power, the Sessions Judge could have exercised the same. It makes a lot of difference because the considerations would differ and vary. The rejection of bail in a nonbailable case at the initial stage and the cancellation of bail already granted, have to be considered and dealt with on different basis. Very cogent and overwhelming circumstances are necessary for an order directing the cancellation of the bail, already granted. It is not the case of the Department that the Magistrate had no jurisdiction to grant the bail. If the offence under Section9 of the Central Excise Act would have been punishable with life imprisonment, then it could definitely be argued that the Magistrate had no jurisdiction to grant bail. Generally speaking, the ground for cancellation of bail, broadly (the illustrative and not exhaustive) are interference or akin to interference with the due course of administration of justice or evasion or attempt to evade the due course of justice or abuse of the concession granted to the accused in any manner. However, bail once granted should not be cancelled in a mechanical manner without considering whether any supervening circumstances have rendered it no longer conducive to a fair trial to allow the accused to retain his freedom by enjoying the concession of bail during the trial. (See: Dolat Ram And Others Vs. State of Haryana, (1995) 1 SCC 349).
13. As noted above, the applicants have already deposited an amount of Rs.2.62 crore with the Department, it would not be out of place to state at this stage that the liability ultimately has to be determined by the authority concerned under the Act and that too, by undertaking the adjudication proceedings as prescribed. The figure of evasion arrived at appears to be tentative. For the purpose of fixing the exact liability, the authority will have to issue showcause notice and initiate the Page 8 of 9 HC-NIC Page 8 of 9 Created On Mon Aug 14 05:10:53 IST 2017 R/SCR.A/1790/2017 ORDER adjudication proceedings. Be that as it may, even the balance amount of about Rs.95 lac would be paid by the applicants in equal monthly installments of Rs.10 lac, as submitted by the learned senior counsel.
14. In the overall view of the matter, I am convinced that the revisional court committed an error in passing the impugned order and cancelling the bail granted by the learned Judicial Magistrate, Rajkot to the applicants. The impugned order accordingly is quashed. The order passed by the learned Judicial Magistrate, Rajkot is afirmed and the applicants are directed to comply with the terms and conditions as laid down by the learned Chief Judicial Magistrate, Rajkot in the order. As submitted from next month onwards, the applicants shall start depositing Rs.10,00,000/ (Rupees Ten Lac Only) in equal monthly installments with the Department. Ofcourse, this will be without prejudice to their rights and contention and without in any manner admitting the alleged evasion of the excise duty.
15. With the above, this application is disposed of. Rule is made absolute to the aforesaid extent. Direct service is permitted.
(J.B.PARDIWALA, J.) aruna Page 9 of 9 HC-NIC Page 9 of 9 Created On Mon Aug 14 05:10:53 IST 2017