Delhi High Court
Sudarshan Lohia vs Uoi Through Chief Commissioner Of ... on 22 January, 2010
Author: Mool Chand Garg
Bench: Mool Chand Garg
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ Crl.M.C. 239/2004
Date of Reserve: 22.12.2009
Date of Decision: 22.01.2010.
SUDARSHAN LOHIA ..... Petitioner
Through: Mr. Mohit Kumar, advocate
versus
UOI through Chief Commissioner of Customs, ND ..... Respondent
Through: Mr. Satish Aggarwala, advocate
CORAM:
HON'BLE MR. JUSTICE MOOL CHAND GARG
1. Whether the Reporters of local papers may be allowed Yes
to see the judgment?
2. To be referred to Reporter or not? Yes
3. Whether the judgment should be reported in the Digest? Yes
MOOL CHAND GARG,J
1. The petitioner who has been arrayed as accused No. 2 in complaint case No.
VIII-(Law)/Cus/174/98 pending before the ACMM Patiala House, New Delhi filed
under Section 132/135(1)(a) of the Customs Act seeks quashing of the order dated
02.09.1998, taking cognizance on the aforesaid complaint against him on the ground,
that the said complaint is not only barred by time but is also not maintainable qua him
as there is no evidence admissible in law which may result in his conviction. It is,
thus, prayed that proceedings in that case against the petitioner be quashed by
exercising powers of this Court under Section 482 of the Cr.P.C. as the trial of the
petitioner in that case without there being any evidence against him would tantamount
to abuse of the process of the Court
2. Briefly stating, the facts giving rise to the filing of this petition are:
Crl.M.C. 239/2004 Page 1 of 6
i. Accused no.1 Shri Adarsh Bhushan Mitra who is the owner and
proprietor of M/S Magadh Enterprises and who is in export business
procured an export order to supply public address system and jackets
to one M/S Rafisons Pvt. Ltd. Dubai P.O. Box No. 61236
ii. The petitioner at the request of accused no. 1 suggested name of a
Custom House Clearing Agent (CHA) namely M/S Bhatia Shipping
and Agencies Pvt. Ltd. to the said accused as he was knowing the ex-
manager Shri Ved Bhatia of M/S Bhatia Shipping Agency.
iii. The petitioner also visited Customs office in Patpargang for the
purpose of processing documents which had to be filed by accused no.
1 before the Customs authorities. Similarly, the petitioner also
suggested the source of purchasing jackets to the first accused in
Kolkata from whom the first accused engaged the purchase of jackets
with one Pavan Goenka. However, it has been submitted that the
petitioner is in no way connected with the export of any of the goods
which the first accused was to undertake & did not get any financial
advantage nor had any intention to do so.
3. The petitioner submits that the aforesaid complaint and the order of
cognizance needs to be quashed, inter alia, on the following grounds:
i. Because, the petitioner is not associated in any capacity with the
proprietorship concern of the accused no. 1. The petitioner is neither a
partner nor an employee, nor instrumental in taking decision of M/S
Magadh Enterprises. It is pertinent to mention here that the present
petitioner is NEITHER THE EXPORTER NOR THE IMPORTER and
as such the complaint filed against the petitioner is an abuse of process
of law and the same is liable to be quashed.
ii. Because, the petitioner has not assisted and/or contributed financially
for the procurement of public address system or the jackets so as to
create any interest for himself in the export deal of the accused no.1.
iii. Because, the allegations made against the petitioner not sustainable in
the eyes of law as the petitioner had simply suggested the name of
Crl.M.C. 239/2004 Page 2 of 6
CHA agent, source of procurement of jackets and delivery of some
documents to the CHA and therefore no guilt/offence can be attributed
to the petitioner. As such the process issued against the petitioner is a
result of non-application of mind and a mechanical approach which
deserves to be quashed at this stage alone by this Hon'ble court to
prevent manifest injustice.
iv. Because, the petitioner admittedly had not signed any documents
relating to the offences alleged and even as per the case of the
prosecution itself it was only accused no. 1 who signed all such
documents and further the petitioner did not help the accused no. 1 or
any one else in the preparation of the same, and he never ascertained
any valuation as he was/is not concerned with any monetary outcome
of any transaction conducted by the accused no. 1 and further the
petitioner did not finalize the final prices of the items/ goods which
were to be exported and the petitioner had no role to play either in the
export business or otherwise.
v. Because, the ingredients of Sections 132 and 135(1)(a) are not made
out and the same cannot be made out under the facts and
circumstances as the prosecution and the Ld. Magistrate failed to
consider that the Section 132 is not applicable in the present case and
also Section 135 of the Customs Act can't be attracted qua the
petitioner as he is not the exporter as envisaged in the Section 19 of
FERA under which the prohibition has been alleged to have been
violated.
vi. Because, no case under Section 132 of the Customs Act is made out as
admittedly the petitioner never made, signed, used any document,
declaration or statement in the course of the export business of accused
no. 1 knowingly or under a belief that such declaration, document or
statement is false in any material particular. It is the case of the
prosecution agency that the petitioner never signed any documents
pertaining to the export business and even the statement of Accused
No. 1, recorded by the customs official under Section 108 of the
Customs Act reveals that it was only accused no. 1 who made,
prepared and signed and further gave instruction relating to the said
Crl.M.C. 239/2004 Page 3 of 6
documents to various persons meant for his export business. Thus
looking from any angle there is no material against the petitioner, the
criminal proceedings initiated against him are liable to be quashed.
vii. Because, the violation as contemplated under Section 18 (1)(a) of the
FERA is only applicable to the exporter and goods relating to the
exporter and the declaration to be filed by the exporter and the
violation of the said Section of FERA cannot be attributed to the
petitioner who is neither an exporter of goods nor associated in any
capacity with the exporter M/S Magadh Enterprises. Hence the
provisions of Section 135(1)(a) of the Customs Act for violation of the
prohibition under FERA cannot apply to the petitioner as admittedly,
even as per the admission by the prosecution agency in para no. 2 of
the complaint the accused no. 1 is the exporter and owner of the goods
in question.
viii. Because, even otherwise, the prosecution agency has tried to rope in
the petitioner for attempt to claim higher credit entitlement under
DEPB Scheme (Duty Entitlement Passbook Scheme) which is not
applicable in present case and in any event to the present petitioner.
ix. Because, the DEPB Scheme allows drawback of import charges on
inputs used in the export products. The objective of DEPB Scheme is
to neutralize the incidence of customs duty on the import content of
the export product. The neutralization under the Scheme is provided
by way of grant of duty credit against the export product. The said
DEPB Scheme comes within the ambit of DUTY EXEMPTION
SCHEME which enables DUTY FREE IMPORT OF INPUTS
required for EXPORT PRODUCTIONS.
Admittedly, no import of any inputs or raw materials or any ancillary
items required for the production of the items meant for export was
ever carried out even by the accused no. 1. It is the case of the
prosecution by their own admission that the products were indigenous
and the same were procured from Bhagirath Palace, Delhi, Roorkee
(Uttaranchal) and Kolkata. Thus, there was/is no scope to violate or
misuse the DEPB Scheme and any wrong belief of the accused no. 1
Crl.M.C. 239/2004 Page 4 of 6
regarding the same can never be the basis of any crime and/or
conviction as the same could not have been availed of by the accused
no. 1 and in no case by the accused no.2.
Therefore, the entire case of prosecution against accused no.2 is not
made out and the said proceedings are liable to be quashed at once.
x. Because, the sanction by the Commissioner of Customs for
prosecution is invalid and void ab-initio as it is a result of non-
application of mind and suffers from grave lacuna of being mechanical
in nature without going into to the correct facts and without testing the
applicability of the provisions of the Customs Act and FERA and the
DEPB Scheme.
xi. Even the statement of accused no. 1 recorded under Section 108 of the
Customs Act and that of the complainant does not implicate the
petitioner in the aforesaid case. Besides that, there is no other
evidence available with the respondent against the petitioner.
4. I have heard the submissions of both the sides. None of the parties have filed
written submissions despite opportunity granted.
5. Section 135 of the Customs Act reads as under:
Section 135 - Evasion of duty or prohibitions
[(1) Without prejudice to any action that may be taken under this
Act, if any person--
(a) is in relation to any goods in any way knowingly
concerned in misdeclaration of value or in any
fraudulent evasion or attempt at evasion of any duty
chargeable thereon or of any prohibition for the time
being imposed under this Act or any other law for the
time being in force with respect to such goods; or
(b) acquires possession of or is in any way concerned in
carrying, removing, depositing, harbouring, keeping,
concealing, selling or purchasing or in any other manner
dealing with any goods which he knows or has reason to
believe are liable to confiscation under section 111 or
section 113, as the case may be; or
(c) attempts to export any goods which he knows or has
reason to believe are liable to confiscation under section
113; or
(d) fraudulently avails of or attempts to avail of drawback
or any exemption from duty provided under this Act in
connection with export of goods,
Crl.M.C. 239/2004 Page 5 of 6
he shall be punishable,--.............."
6. In view of the aforesaid provision, the petitioner not being an exporter and
there being nothing on record to suggest that he was involved in the export
concerned; no case is made out against him under Section 135 of the Customs Act.
7. Section 132 of the Customs Act reads as under:
Section 132 - False declaration, false documents, etc
Whoever makes, signs or uses, or causes to be made, signed or
used, any declaration, statement or document in the transaction
of any business relating to the customs, knowing or having
reason to believe that such declaration, statement or document is
false in any material particular, shall be punishable with
imprisonment for a term which may extend to [two years], or
with fine, or with both.
8. At the outset, it may be observed that in the present case there is nothing to
show that the petitioner made any false declaration or prepared false documents and,
therefore, he is not liable to be prosecuted under Section 132 of the Customs Act. In
this case, moreover the complaint is barred by limitation inasmuch as as per the
provision of Section 132 which existed at the relevant time the punishment which
could have been imposed for violating Section 132 could have extended for a period
of six months or with fine or with both and limitation in such a case as provided
under Section 468 of the Cr.P.C. was only 1 year. In the present case, the complaint
was filed by the respondent on 31.08.1998 whereas the incident in this case pertains
to the year 1997 and, therefore, the complaint was admittedly barred by limitation.
This has also been accepted by the learned counsel for the respondent during the
course of arguments.
9. Consequently, the order taking cognizance against the petitioner and the
proceedings initiated against the petitioner are hereby quashed. The petition is
allowed. The bail bond, if any, of the petitioner stands discharged.
10. Copy of the order be sent to the Trial Court.
MOOL CHAND GARG, J.
JANUARY 22, 2010 ag Crl.M.C. 239/2004 Page 6 of 6