Gujarat High Court
Nili Sheth W/O. Siddharth Sheth Thro ... vs Union Of India on 22 July, 2025
Author: Vaibhavi D. Nanavati
Bench: Vaibhavi D. Nanavati
NEUTRAL CITATION
R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CRIMINAL APPLICATION (HABEAS CORPUS) NO. 9958 of
2025
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
and
HONOURABLE MR.JUSTICE UTKARSH THAKORBHAI DESAI
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Approved for Reporting Yes No
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NILI SHETH W/O. SIDDHARTH SHETH THRO SUREKHABEN W/O
MAHENDRAKUMAR SHAH
Versus
UNION OF INDIA & ORS.
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Appearance:
MR VIKRAM CHAUDHARY, SENIOR ADVOCATE
MR DEVANG VYAS, SENIOR ADVOCATE
WITH MR ABHISHEKKUMAR C MALVI(9941) for the Applicant(s) No. 1
MR MAULIK VAKHARIYA(6628) for the Applicant(s) No. 1
MR PRADIP D BHATE(1523) for the Respondent(s) No. 1
MR N VENKATRAMAN, ASSISTANT SOLICITOR GENERAL with MR
UTKARSH R SHARMA(6157) SR. STANDING COUNSEL with MS JIRGA
JHAVERIA, APP for the Respondent(s) No. 3,4
PUBLIC PROSECUTOR for the Respondent(s) No. 2
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CORAM:HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
and
HONOURABLE MR.JUSTICE UTKARSH THAKORBHAI DESAI
Date : 22/07/2025
ORAL JUDGMENT
(PER : HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI) Page 1 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined
1. The petitioner herein Nili Sheth, wife of Siddharth Sheth through her mother Surekhaben, wife of Mahendrakumar Shah seeks a writ of habeas corpus under Article 226 of the Constitution of India, seeking release from illegal detention and challenging the order dated 12.7.2025 passed by the learned Judicial Magistrate on the ground that, her arrest by the respondent No.3 herein invoking Section 104 of the Customs Act, 1962 is unlawful, and the petitioner herein is in illegal confinement in judicial custody from 12.7.2025.
2. It is the case of the petitioner that, the aforesaid action by the respondent No.3 is breach of her fundamental rights as guaranteed under Articles 19, 20, 21 as well as 22(1) and (2) of the Constitution of India.
2.1 It is the case of the petitioner that, she is the mother of a 13 years old child (son) who is currently studying in 7 th Standard. The petitioner has studied upto Class-12 and got married at the age of 21 years, and after few unfortunate miscarriages, she gave birth to a son in the year 2012.
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NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined 2.2 The petitioner's parental side comprises of her parents, a brother and a sister (who is also married and lives separately in her matrimonial home).
2.3 Upon being asked by her father, the petitioner had taken the premises on rent on his behalf in the building in which she resides. Apart from taking and paying of the rent of the said premises where, allegedly her father's property (including bullion etc.) was kept, the petitioner has absolutely no knowledge or awareness or connection with the said property. The petitioner's mother Smt. Surekhaben is suffering from breast cancer.
3. The facts leading to the filing of the present petition are summarized as under :-
3.1 On 17.3.2025, at around 3:00 p.m., Anti Terrorist Squad, Gujarat Police (ATS) alongwith the officials of DRI (approximately 35 officers) arrived at Flat No.104, Avishkar Apartments 3, Mahalaxmi Society, Near Mahalaxmi Temple, Mahalaxmi Char Rasta, Beside Hocco Street, Paldi, Ahmedabad for allegedly carrying out a search at the said premises.Page 3 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025
NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined 3.2 As the said premises was locked, the Secretary of the building was called, who stated that the flat was rented out and "a relative of the tenant" was staying nearby. A panchnama came to be drawn at around the same time wherein one person Shri Hemal Prakash Shah, an advocate by profession introduced himself as the "cousin of Shri Meghkumar Shah, who lived in Mumbai". He informed the officer that, he had the keys to open the locked flat. Accordingly, he opened the flat and search was conducted by the respondent No.3 herein.
3.3 It was further recorded that, one of the rooms adjacent to the main toilet was found locked and the keys to the same were asked to be arranged. In there, one metal almirah having two locks on each door and two metal frames bed/palang were there. On opening of the said locked almirah, leather bags, trolley bags, ladies bags were found having been kept inside. 3.4 In one such bag, the officer recovered 1.37 crores of cash, around 87.920 kgs of gold bars, 19.663 kgs jewellery studded/gold jewellery and high-end watches.
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NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined 3.5 It is the case of the petitioner that, she met the officer at around 4:30 p.m. and informed them about she being the daughter of Shri Mahendrakumar Shah and sister of Shri Meghkumar Shah. She duly informed that, she resided in the same building on the 4 th floor in Flat No.403. She was made to join the search proceedings and upon asking, she narrated that her brother was engaged in share-trading business and was living in Mumbai. 3.6 The petitioner denied knowledge, awareness, link or connection with the allegedly recovered cash/valuables and also denied having access to any kind of documents with respect to the purchase or import or possession of the same. 3.7 The search apparently continued till the next day i.e. 18.3.2025 until about 6:40 a.m. and a panchnama without any annexure was furnished wherein, certain above mentioned facts were narrated. The said panchnama is duly produced at Annexure- P1 at pages 71 to 106.
3.8 The petitioner's father and brother have also been issued summons to appear, to which, the petitioner did not have any Page 5 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined knowledge.
3.9 The petitioner co-ordinated with the respondent No.3 for collection of the annexures to the panchnama and after telephonic conversation, she reached at the stipulated time i.e. 1:00 p.m. on 19.3.2025 at the DRI office. She was provided only Annexure-A to the purported inventory of each items. The rest of the Annexures i.e. Annexure-B which pertained to property documents alongwith a file-wise list as well as Annexure-C which was the purported valuation report dated 18.3.2025 submitted by the approved valuer, have not been furnished to the petitioner. 3.10 When the petitioner was about to leave the office of the DRI at around 4:00 p.m. or so, she was mischievously handed over a summons issued in terms of Section 108 of the Customs Act, 1962 calling her to appear at 5:00 p.m. on the same day. The said summons according to the petitioner was a mockery as she was physically present in the office. The petitioner was eventually made to sit in the office of the DRI till around 8:00 p.m., much after the sunset. The said summons dated 19.3.2025 is placed on record as Annexure-P3 at page-108.
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NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined 3.11 The petitioner was appraised that, her father and brother's house in Mumbai i.e. Bungalow No.13 Magnum Tower, Lokhandwala, 2nd Cross Lane, Andheri West was barged into by certain DRI officers on 19.3.2025, who sealed the premises. None of the petitioner's parental family members were present at that time as her father and brother were travelling, whereas, her mother, who is a cancer patient, had come to Ahmedabad. Her sister-in-law (her brother's wife) Mrs. Apurva Jain had just delivered a baby in December, 2024 and was at her parental home in Indore. On 11.7.2025, the Mumbai premises was de-sealed. 3.12 On 21.03.2025, the petitioner's cousin namely, Kevin Mahesh Kumar Shah, who merely came at the time of alleged search to be beside the petitioner was also subjected to harassment, though he was not in any way connected with the family of the petitioner insofar as the business or affairs were concerned, and was certainly not related to the alleged recovery in any manner.
3.13 On 22.03.2025, the panchnama was drawn relating to the Page 7 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined search conducted at the Terminal-2 at SVPI, International Airport, Ahmedabad.
3.14 On 26.03.2025, the panchnama was drawn relating to search at Flat No. 403, Avishkar Apartment, 3, Mahalakshmi Society, Opposite. Mahalakshmi Mandir, Paldi, VTC, Ahmedabad and at FP-780,12, Kalivalya, 36, Brahman Mitra Madal Society, Near Pritam Nagar Akhado, Paldi, Ahmedabad. 3.15 On 03.04.2025, the petitioner preferred Special Criminal Application (Quashing) No. 5020 of 2025 seeking quashing of the summons issued and stay of the proceedings.
3.16 An interim application came to be filed in the said Special Criminal Application (Quashing) No. 5020 of 2025 being Application No.1 of 2025 for amendment and Application No.2 of 2025 for orders which is pending.
3.17 In the interregnum period, the respondent herein preferred Application No.DRI/AZU/GI-02/ENQ-28/2025 on 05.04.2025 & 07.04.2025/08.04.2025 before the Additional Chief Metropolitan Page 8 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined Magistrate, Ahmedabad praying to take cognizance of the offence under Sections 208 and 210 of the Bharatiya Nyaya Sanhita, 2023 (BNS) against the petitioner as well as her brother and her father and prayed for further directions to ensure compliance by the accused/ respondent i.e. petitioner herein. The said complaint is duly produced at Annexure-P25 page-276.
3.18 On 07.04.2024, the said petition came up for hearing. Notice came to be issued on the same day.
3.19 The said petition is preferred by the petitioner herein qua the manner and method in which investigation was conducted by the respondent authority and harassment caused to her wherein, it is observed in the interim order that the respondent being a statutory authority, is bound to follow the rule of law and supposed to take care of constitutional right and safeguard all the citizens. The investigation was directed to be continued keeping in mind the aforesaid fact. The said interim order is duly produced at Annexure-P29 page-292.
3.20 On 22.04.2025, the mother of the petitioner also preferred Page 9 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined Special Criminal Application (Quashing) No.6038 of 2025, which is also pending adjudication.
3.21 The learned Additional Chief Judicial Magistrate, Ahmedabad City by order dated 7.4.2025 allowed the said application by directing the complaint to be registered. The said order is duly produced at Annexure-P25 page-283. 3.22 The said order passed by the learned Additional Chief Judicial Magistrate, Ahmedabad City dated 7.4.2025 was subject matter of challenge before the Hon'ble Apex Court by preferring SLP (Crl.) 7893 of 2025 which came to be dismissed, however while dismissing the Appeal the Hon'ble Apex Court in paragraphs 3 and 4 observed that, it was open for the petitioner to seek remedy against the impugned order before the appropriate Court or the High Court and that, the Hon'ble Apex Court was not inclined to interfere under Article 136 of the Constitution of India.
The learned Senior Counsel appearing for the appellant in the said proceedings submitted that, the question of law raised by the appellant was decided by the Coordinate Bench of the Hon'ble Page 10 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined Apex Court. The Hon'ble Apex Court in view thereof stated that, if that be so, the petitioner may place it before the Court that the petitioner approaches. The said order is placed on record by way of Annexure-P26 at page-284.
3.23 The petitioner thereafter preferred Special Criminal Application No.7814 of 2025 before the High Court Gujarat, wherein the order dated 7.4.2025 passed by the learned Additional Chief Judicial Magistrate, Ahmedabad City was subject matter of challenge which was quashed and set aside by order dated 3.7.2025. While quashing the order dated 7.4.2025 passed by the learned Additional Chief Judicial Magistrate, Ahmedabad City, the petitioner was directed to appear before the learned Magistrate on 21.7.2025. The learned Magistrate was directed to grant an opportunity of hearing to the petitioner in terms of proviso of Section 223 (1) of the BNSS and pass appropriate order. 3.24 The petitioner also approached the Hon'ble Apex Court invoking Article 32 of the Constitution of India by preferring Writ Petition (Criminal) No.241 of 2025 seeking transfer of investigation from Directorate of Revenue Intelligence to the Special Page 11 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined Investigating Team or any other competent authority outside Ahmedabad, which came to be dismissed with a liberty to mention before the Vacation Bench, if there was any urgency in the matter. 3.25 The aforesaid gave rise to the Special Criminal Application No.5020 of 2025, as referred hereinabove.
4. On 12.7.2025, the respondent Nos.3 and 4 herein in an absolutely highhanded manner flouting all the rule of law proceeded to arrest the petitioner from SVPI, International Airport, Ahmedabad while she was undertaking travel with her minor child as well as her mother, sister and children to Dubai. 4.1 The learned Magistrate on an even date in routine manner allowed the application filed by the respondents herein seeking judicial custody of the petitioner by order dated 12.7.2025 ,which has given rise to filing of the present petition.
5. Heard Mr. Vikram Chaudhary, the learned Senior Counsel and Mr. Devang Vyas, the learned Senior Counsel assisted by Mr. Abhishekkumar C. Malvi and Mr. Maulik Vakhariya, the learned Page 12 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined advocates appearing for the petitioner.
5.1 Mr. Chaudhary, the learned Senior Counsel relied on the judgment rendered by the Hon'ble Apex Court in the case of Radhika Agarwal vs. Union of India, reported in 2025 SCC Online 449 and submitted that, the word "guilty" as provided in Section 19 of the PMLA before arrest is akin to word "commit" provided in Section 104(1) of the Customs Act, so there is no difference between the two and same material would be required in both the scenarios since, the authority would arrest the petitioner only if she had committed an offence. It is submitted that, though the Courts are not entitled to undertake a merits review, but the Courts can undertake judicial review which is based on three parameters which are laid down in the said judgment viz,
(i) that the material on the basis of which the arrest is made, did it qualify admissibility in evidence or not ?
(ii) the material on the basis of which the arrest is made, are they all or entire or handpicked or chosen ?
(iii) the obligation on the Court before whom remand is taken or before whom accused/arrestee is produced.
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NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined 5.2 It is submitted that in the facts of the present case, the arrest is gross abuse of process of law. It does not qualify the test laid down in the case of Radhika Agarwal (Supra) which is a binding precedent. The arrest conceals more than it reveals. The grounds of arrest do not encompass - enclose any material to arrest the petitioner.
5.3 Reliance is also placed on the ratio laid down by the Hon'ble Apex Court in the case of Arvind Kejriwal vs. Directorate of Enforcement, reported in (2025) 2 SCC 248. It is submitted that, Hon'ble Apex Court considered the contentions in the said judgment wherein upon testing the arrest, there were some statements in favour of Mr. Kejriwal which the competent authority chose not to consider, and only that material which was adverse to the said petitioner, was taken into the consideration for grounds of arrest and "reasons to believe".
In the facts of the present case, when the authorities arrested the petitioner, they did not have the complete material for arrest.
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NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined 5.4 Mr. Chaudhary, the learned Senior Counsel also relied on the ratio laid down in the case of Pankaj Bansal vs. Union of India, reported in 2023 SCC Online SC 1244 and in the case of Arnab Manoranjan Goswami vs. State of Maharashtra and Ors., reported in 2020 SCC Online SC 964.
5.5 Mr. Chaudhary, the learned Senior Counsel also relied on the ratio laid down in the case of Mohinder Singh Gill Versus Chief Election Commissioner, New Delhi, reported in (1978) 1 SCC 405, paragraph-8.
5.6 Mr. Devang Vyas, the learned Senior Counsel as such also reiterated the contentions raised by Mr. Chaudhary, the learned Senior Counsel and submitted that, the case of the present petitioner does not fall within the ambit of Section 104 of the Customs Act read with Section 136(1B)(2) of the Act so as to arrest the petitioner herein, and that the learned Judicial Magistrate has erred in allowing the application preferred by the respondent No.3 seeking permission to arrest the petitioner. 5.7 Mr. Vyas, the learned Senior Counsel also submitted that, Page 15 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined the grounds of arrest stated by the respondent authorities are such that the same do not fall within the ambit of Section 104 of the Customs Act, and in view thereof, the impugned order dated 12.7.2025 was required to be interfered with, the same having been passed mechanically and present petition be allowed by quashing the impugned order dated 12.7.2025 and that, the petitioner be released on any terms and conditions as this Court deems fit and the prayers prayed for, be allowed.
6. Heard Mr. N. Venkatraman, the learned Assistant Solicitor General assisted by Mr. Utkarsh Sharma, the learned Senior Standing Counsel appearing for the respondents No.3 and 4. 6.1 It is submitted that, the aforesaid exercise undertaken by the respondent authorities was just and proper. In the facts of the present case the respondent authorities have duly complied with the dictum/ratio laid down by the Hon'ble Apex Court in the case of Arvind Kejriwal (Supra) and Radhika Agarwal (Supra).
It is submitted that, the guidelines/legal requirement laid down by the Hon'ble Apex Court was duly followed wherein, it was Page 16 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined held that, once the "reasons to believe" standard was satisfied based on credible material at the stage of arrest, the Courts did not have to evaluate the sufficiency of evidence or dwell into merits. 6.2 It is submitted that, the respondents No.3 and 4 having complied with the same, have also specified the grounds of arrest and the same clearly delineates the petitioner's specific role as revealed during the ongoing investigation, and was supported by substantial material evidence. The Grounds of Arrest clearly demonstrate due application of mind by the arresting officer, as provided/required under Section 104(1) of the Customs Act, 1962. 6.3 It is submitted that, the respondents herein have complied with two fold requirements, as submitted hereinabove. The contentions of the petitioner that, the matter being subjudice precluded the respondent No.3 from examining her at its office or effecting her arrest, is legally unsustainable. It is submitted that, mere pendency of proceedings do not fetter the statutory powers of an investigating agency in absence of any express judicial restraint.
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NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined 6.4 It is submitted that, the petitioner was not summoned but was rather intercepted by the Immigration Officer at the airport while she was leaving for Dubai, and was handed over to the DRI officials at approximately 9:00 a.m. on 12.07.2025, pursuant to a valid look-out circular. The petitioner was examined in accordance with law during permissible hours, and in the presence of woman officers, her statements were recorded under CCTV surveillance. The arrest was effected at around 4:50 p.m. on the same day, well within the time frame permitted for the arrest of women under the applicable legal framework. All procedural safeguards, including those under Section 104 of the Customs Act, 1962, and relevant provisions of the CrPC, were duly complied with. 6.5 It is submitted that, the petitioner's allegation that the arresting officer failed to consider relevant proximate materials or establish a direct causal link between such materials and the exercise of arrest powers is unfounded. The arresting officer exercised due application of mind to all pertinent facts, documentary evidence, and the petitioner's conduct during the investigation, whereby the petitioner was summoned thrice in the interregnum period, however, she did not choose to appear before Page 18 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined the authority. The decision to arrest her was made upon satisfying the statutory threshold of necessity under Section 104 of the Customs Act, 1962 based on material demonstrating a clear connection to the petitioner's alleged involvement in the offence. 6.6 It is submitted that, the investigation was ongoing and had not reached finality, however, because of non co-operation of the present petitioner and the other key accused, the investigation till date had revealed enough incriminating evidence to establish the role of the present petitioner to effect her arrest. Further, investigation by way of recording statement of the present petitioner within the Jail premises stood duly authorised by the ACMM, Ahmedabad City and the process of collecting, verifying, and confronting incriminating material is continuing. In such circumstances, drawing any adverse inference regarding the legality or necessity of arrest is premature and misconceived. It is submitted that the allegations of mala fides or abuse of process of law are required to be rejected, since the same were devoid of substance and merits.
6.7 It is submitted that, the petitioner's contention about Page 19 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined challenge to issuance of lookout circular, is misleading and devoid of legal merit, the same having been issued by the competent authority in accordance with the applicable guidelines, based on credible material indicating likelihood of the petitioner evading the process of law.
6.8 It is submitted that despite repeated issuance of summons on 24.03.2025, 26.03.2025, 01.04.2025, and 02.04.2025, the petitioner failed to appear before the investigating agency, except for her single email in response to the summons dated 24.03.2025 citing medical grounds, without enclosing any supporting documents, and at no stage were any reasons for her non- compliance communicated either to the agency or to the Court. In her recorded statement, the petitioner on one hand claimed she was unwell and on the other, had undertaken a spiritual trip outside Ahmedabad, while also asserting that, she had no connection with the case-explanations that are patently evasive and self-serving.
6.9 It is submitted that, the petitioner had time to undertake a spiritual trip and make arrangements for her international travel to Page 20 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined Dubai booking her ticket in cash and failing to disclose the source, the petitioner made no effort whatsoever to respond to the investigating agency or to inform to the Court during the interregnum period. The conduct of the petitioner demonstrates non-cooperation with an intent to avoid the investigation. 6.10 It is reiterated that, the two principal accused in the present case, Shri Meghkumar M. Shah and Shri Mahendrakumar A. Shah, who are brother and father respectively of the petitioner, are absconding and willfully evading the legal proceedings, thereby obstructing the administration of justice. They have fled the country via Nepal to Dubai in an apparent attempt to evade ongoing legal proceedings and the investigation, in the facts of the present case. 6.11 It is submitted that, in the petitioner's statement recorded under Section 108 of the Customs Act, 1962 on 12.7.2025 the petitioner confirmed the receipt of summons but offered unsubstantiated excuses for non-appearance, which were never formally communicated to the investigating agency and placed before the Court. That, during her sole appearance, her responses were evasive, and she failed to disclose material facts, including Page 21 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined the source of undisclosed cash used to book an international flight to Dubai.
6.12 The petitioner's claim of cooperation in view of the aforesaid submissions is devoid of merit and the same is not borne out from the record.
6.13 It is submitted that, the present petition is filed with an attempt to obstruct and derail the investigation. It also appears to be an attempt to divert the attention of the Agency to cover up petitioner's brother's and father's non-cooperation, and to buy crucial time for destruction of evidence.
6.14 It is further submitted that, Section 104 of the Customs Act can be invoked only when there is reasons to believe that a person has committed an offence punishable under Sections 132 or 133, or 135 or 135A or 136 of Customs Act, 1962, subject to general or special order of the Principal Commissioner of Customs or Commissioner of Customs.
The facts of the present case fall under Section 135(1) (b), and accordingly punishable under Section 135(1)(i)(A) & (B) of the Page 22 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined Customs Act, 1962. The offence committed by the petitioner is cognizable offence under Section 104(4)(b) and the same is non- bailable under Section 104(6)(a) & (c) of the Customs Act, 1962. Pursuant to the formation of "reasons to believe", as required under law, the competent authority accorded permission to arrest the petitioner. It is reiterated that, the arrest of the present petitioner was carried out in strict compliance with the relevant provisions of the Customs Act, 1962, as well as the applicable guidelines prescribed therein.
6.15 Placing reliance on the aforesaid, it is submitted that the petitioner's remedy lies in preferring an application seeking bail and all the contentions raised in the present petition should be taken up in the said proceedings. The challenge to arrest by way of present petition seeking issuance of writ of habeas corpus does not satisfy the conditions as stipulated by the Hon'ble Apex Court in the case of Arvind Kejriwal (Supra) and Radhika Agrawal (Supra). The Hon'ble Court should not exercise powers of judicial review as the facts and conduct of the petitioner does not warrant the same.
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NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined
7. The learned Assistant Solicitor General placed reliance on the decision in case of Radhika Agrawal (Supra) wherein, parameters of judicial review are extensively discussed by the Hon'ble Apex Court and submitted that, we are bound by the principle laid down by the Hon'ble Apex Court in the case of Arvind Kejriwal (Supra) and Radhika Agrawal (Supra). Radhika Agrawal (Supra) clinches the issue wherein, it pertains to the provisions of Customs Act.
8. Mr. Chaudhary, the learned Senior Counsel in rejoinder reiterated the contentions raised earlier and also reiterated the ground raised in the petition wherein, reliance is placed straneously on the judgment rendered in case of Radhika Agrawal (Supra) which provides for compliance by the competent officer prior to arresting a person for commission of an offence punishable under Section 104(1) of the Customs Act, as referred to in Ground (E) and (F) of the petition.
Analysis :-
9. Having heard the learned counsels appearing for the Page 24 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined respective parties, to arrive at a final conclusion the following emerge :-
9.1 Acting upon intelligence regarding the concealment of a significant quantity of smuggled gold bars and jewelry at Flat No. 104, Avishkar Apartment, Mahalaxmi Society, Paldi, Ahmedabad, a team of officers from DRI, Ahmedabad, and ATS, Gujarat, conducted a search on the said premises on 17th and 18th March 2025 under a search authorization dated 17th March 2025 (CBIC DIN 202503DDZ100001631CE) and the said entire proceedings were recorded under Panchnama dated. 17/18.3.2025.
9.2 The aforesaid led to the recovery of the following items, which were detained and subsequently seized under the seizure memo dated 28.3.2025 and an Addendum dated 13.05.2025 to the said seizure memo dated 28.03.2025 whereby Rs.2,500/- were found extra by the bank officials during the mechanical counting of the currency notes for deposition of the same in the bank under panchnama dated 25.04.2025 drawn at Sardar Vallabhbhai Patel International Airport, Ahmedabad, thus bringing the total seizure of currency amounting to Rs. 1,37,98,000/- (Rupees One Crore Page 25 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined Thirty-Seven Lakh Ninety-Eight Thousand Only). Details of Seized items are reproduced hereinbelow:-
SR. Details PCS Purit Net Market value Tariff Value No. of Items y Weight (Rs) (Rs) in Gram 1 Gold 882 999.0 88020.0 79,83,41,400/ 72,72,19,48 Bars 24 Kt 0 - 0/-
2 Gold - - 19794.0 12,88,32,991/ -
Jewelry 8 -
3 Watch 2 - 100.100 4,23,449/-
Belts
4 Watches 10 15,19,76,108/ -
-
5 Mobile 1 - 12,000/- -
6 Currency - - - 1,37,98,000/- 1,37,98,000/
(INR) -
Total Seizure value: Rs. 109,33,83,948/-
9.3 During the course of Panchnama proceedings, it was
revealed that Flat No.104, Avishkar Apartment, Mahalaxmi Society, Paldi, Ahmedabad, was rented to Shri Meghkumar M. Shah, the brother of the petitioner herein - Ms. Nili S. Sheth, for past 4 to 5 months. Additionally, during the said proceedings, the present petitioner Ms. Nili S. Sheth presented herself as the sister of Shri Meghkumar M. Shah and requested for permission to join the said Panchnama proceedings. She was accordingly allowed to do so and she remained present throughout the said Panchnama proceedings. Furthermore, the petitioner herein appeared before the investigation agency on 19.3.2025, during Page 26 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined which her preliminary statement was recorded under Section 108 of the Customs Act, 1962.
9.4 During the investigation, new evidence surfaced necessitating the petitioner's presence. Accordingly, summons under Section 108 of the Customs Act, 1962, were issued on 24.3.2025, 26.3.2025, 01.04.2025 & 02.04.2025, which were served via email as well as physically at her residence, requesting her appearances on specified dates. The petitioner herein failed to appear in response to these summons. Instead, the petitioner sent an email on the 24.03.2025 at 7:54 PM, requesting a 10 days adjournment due to medical reasons without annexing supporting documents. Further, the petitioner failed to appear and submit required documents in response to the summons dated 26.03.2025, 01.04.2025 & 02.04.2025.
9.5 The petitioner's brother Shri Meghkumar M. Shah and her father Shri Mahendrakumar A. Shah, both the key accused in the present case have been absconding, and are willfully evading legal proceedings, thereby obstructing the course of investigation.Page 27 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025
NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined 9.6 The present petitioner was detained by the Immigration Authorities at the SVPI Airport, Ahmedabad on 12.07.2025 while travelling to Dubai with her minor child as well as her mother, her sister and her children upon Lookout Circular having been issued by the competent authrotiy in accordance with the applicable guidelines.
10. Mr. Sharma, the learned Senior Standing Counsel has placed before this Court the notes and "reasons to believe"
prepared by the Senior Investigating Officer seeking authorization of Smt. Samta Sharma, SIO authorised to affect the arrest there being "reasons to believe" to do so, pursuant to the investigation conducted so far, proposing arrest of the petitioner under Section 104 of the Customs Act, 1962 and Guidelines issued under Circular No.13/2022 Customs dated 16.8.2022. It was further stated in the arrest report Circular direction shall be complied with.
10.1 The authorization of Smt. Samta Sharma, SIO to arrest the petitioner was granted by ADG. The Commissioner perused the record and opined that, the petitioner has concerned herself in the Page 28 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined act of smuggling a huge amount of foreign origin gold alongwith high end watches amongst other items. The offence committed by the petitioner in the opinion of the said officer fell in the category of Section 135 of the Customs Act and were accordingly punishable.
Further, the offence is a cognizable offence under section 104(4) (B) of the Customs Act. The quantum of smuggled goods indicated existence of an organised racket of gold smuggling and it appeared that, the petitioner herein was a key player and that investigation needed to be carried out to unreveal the complete extent of the smuggling racket. There was also possibility of the person fleeing from justice and also not to cooperate with the investigation, in view thereof Smt. Samta Sharma SIO was autorized to arrest the the petitioner herein under Section 104 of the Customs Act, 1962.
10.2 We have perused in detail, satisfaction arrived at and the authorization by Additional Director General of DRI which constitute "reasons to believe" thereby authorizing the arrest of the petitioner under Section 104 of the Customs Act, 1962. 10.3 On perusal of the submissions made by the competent Page 29 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined officer - Senior Intelligence Officer authorised by Additional Director General of DRI, it emerges that the said submissions record extensively and in detail, the goods recovered pursuant to the search proceeding recorded under the panchnama dated 17/18.3.2025, and valuation/reverification done under the panchnama dated 18/19.3.2025, 19/20.3.2025 and 22.3.2025, the seizure of the detained goods, the recording of the statements, which fall within the category of Section 135(1)(i)(B) the Customs Act, 1962 and accordingly punishable under Section 135(1)(i)(A) & (B) the Customs Act, 1962. Further the offence committed is a cognizable offence under Section 104(4)(B) of the Customs Act and the same is non-bailable under Section 104(6) (A) and (C). 10.4 The total seizure value is approximated to be Rs.109,33,83,948/-. Subsequently, the respondent No.3 approached the learned Incharge Additional Chief Judicial Magistrate, Ahmedabd City alongwith an application for grounds of arrest on even date i.e. 12.7.2025 under Section 104 of the Customs Act, 1962. The respondent No.3 preferred further application praying for sending the accused to judicial custody wherein order came to be passed on 12.7.2025. Page 30 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025
NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined
11. We have perused the grounds of arrest from wherein, it emerges that considering the gravity of offence the Additional Director General of DRI, Ahmedabad accorded permission to arrest the accused i.e. the petitioner herein, as per provisions of Section 104 of the Customs Act, 1962, that there are enough reasons to believe that the accused committed offence punishable under Section 135 of the Customs Act, 1962, that the petitioner/accused is involved in syndicate indulging in outright sumggling of Gold/High end watches. That the offence is an economic offence under the Customs Act which is detrimental to the economy of the nation.
11.1 It emerges that, as referred to hereinabove, based on intelligence, a team comprising of officers of the respondent No.3 through its Deputy Director, Ahmedabad Zonal Unit in collaboration with ATS, Gujarat conducted a search proceeding on 17.3.2025 at Flat No.104, Avishkar Apartments 3, Ahmedabad. The grounds of arrest as stated at page-296 read thus :-
"1. After perusing the records of the case and the gravity of Page 31 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined the offence the Additional Director General of DRI, Ahmedabad, has accorded permission to arrest the accused as per the provisions of Section 104 of the Customs Act, 1962.
2. There are enough reasons to believe that the accused has committed offences punishable under Section 135 of the Customs Act, 1962.
3. The accused were knowingly involved in the syndicate indulged in outright smuggling of Gold/High End Watches. If they are released on bail, the inquiry would be hampered and the inquiring agency would not be able to recover the other documents and there are likelihood of tampering with the evidence and influencing the witness, if the accused is not arrested they may be absconded.
4. The offence under the Customs Act, 1962, is economic offence and detrimental to economy of the nation. Such type of offences should be viewed seriously.
5. The facts of the case have been enumerated in the Annexure- A attached to this Grounds of Arrest."
11.2 During the said panchnama proceedings on 17/18.3.2025, the petitioner herein declined having any knowledge with respect to the above recovery. Further, during the search proceedings, no documents relevant to purchase / import in respect to the said Gold Bars with Foreign origin marks, jewellery, Cash, High-end Page 32 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined watches were found. In absence of any documents relating to purchase/legitimate import in respect of the said Gold Bars as well as High End watches, the said goods were seized under panchnama dated 17/18.03.2025, under reasonable belief that the same were smuggled goods in terms of the Customs Act, 1962 and onus to prove its legitimacy fell on the part of the owner as per Section 123 of the Customs Act, 1962.
The cash as well as jewellery recovered were also not free from doubts since the same might have been generated through income of trading in smuggled gold. Accordingly, under the reasonable belief, the said goods would be liable for confiscation under the provisions of Customs Act, 1962. Consequently, the goods were seized and were deposited at the Customs Warehouse at T-2, SVPI airport, Ahmedabad on 18.03.2025 vide Warehouse Entry No. 7278 dated 18.3.2025.
11.3 The statements of Ms. Kalyaniben Vianybhai Sheth dated 21.3.2025, Mr.Hemal P. Shah dated 26.3.2025, Mr. Kevin Maheshkumar P. Shah dated 26.3.2025 and Mrs. Nili Sheth dated 19.3.2025 and 12.7.2025, were forming part of the application Page 33 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined seeking arrest.
The petitioner's statement is contradicted by Kalyaniben who is the owner of the flat.
11.4 It also emerges that, while recording the grounds of arrest the competent officer considering the statements has stated that the petitioner's non-cooperation is evident from her failure to appear pursuant to the summons sent on 24.03.2025, 26.03.2025, 01.04.2025, and 02.04.2025, citing illness and a spiritual trip outside Ahmedabad. During the search at her residence on 26.03.2025, her phone was found switched off, and she claimed to have lost it in an auto-rickshaw, raising suspicion of deliberate evasion. A Look Out Circular (LOC) was issued, leading to her interception on 12.07.2025 at the SVPI Airport, Ahmedabad, while attempting to board Emirates flight EK541 to Dubai, which was booked 8-10 days prior through an agent by paying cash amount for the air tickets and she having pleaded ignorance about the payment of the said air-fare to the travel agent and where and by whom the said amount was paid.
11.5 Though co-conspirators, Mr. Meghkumar Mahendrabhai Page 34 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined Shah (brother) and Mr. Mahendrakumar Amrutlal Shah (father) were summoned to produce legitimate purchase/import documents of the seized goods, both of them had absconded, reinforcing the organized nature of the smuggling syndicate. 11.6 It is further stated that, the seized goods valued at Rs.109,33,83,948/-, as referred to hereinabove, were not supported by any legitimate documentation. Under such circumstances, as per the provisions of Section 123 of the Customs Act, 1962, the onus to prove their legitimacy lies on the petitioner herein, which she failed to discharge. The goods were deemed to be smuggled and prohibited under Sections 2(39) and 2(33) of the Customs Act, 1962, liable for confiscation under Section 111 of the Act.
11.7 The petitioner's acts of omission and commission facilitating the rental of Flat No. 104, possessing and delaying to provide the keys, engaging in financial transactions linked to the syndicate, withholding information, and attempting to abscond, render her liable for penalty under Section 112 and prosecution under Section 135 of the Customs Act, 1962. The offence falls under Section Page 35 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined 135(1)(b), punishable under Section 135(1)(i)(A) & (B), and is cognizable and non-bailable under Sections 104(4)(b) and 104(6)
(a) & (c).
11.8 The evidence which has come on record, prima facie establishes the petitioner's active role in an organized smuggling syndicate, causing significant economic harm to the nation. The petitioner has attempted to mislead the investigation by indulging in non-cooperation and had planned to flee to Dubai, which indicate a flight risk of tampering with evidence or influencing witnesses, if released on bail. No documents i.e. purchase/legitimate import documents in respect to recovered Gold Bars as well as High End watches, which fall under the purview of Section 123 of the Customs Act, 1962 and onus to prove its legitimacy which fell on the part of the owner, have been received/produced.
11.9 Further, no documents in respect to the source of the cash recovered as well as jewellery found have been submitted by the petitioner or the persons upon whose instructions, she was acting. In such event, same would be liable to confiscation under the Page 36 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined provision of Section 111 of Customs Act 1962 and render the person involved, liable to penalty under the provisions Section 112 of Customs Act, 1962 and as such, she would be rendered liable for prosecution in terms of the provision of Section 135 of the Customs Act, 1962.
11.10 It is further stated that, the instant case ostensibly falls under Section 135(1)(B) and accordingly punishable under Section 135(1)(i)(A) & (B) the Customs Act, 1962. Further, the offence committed by her is cognizable offence under Section 104(4)(b) and is non-bailable under Section 104(6)(a) & (c). That herein is a clear cut case of organized smuggling of Foreign Origin Gold, Gold Jewelry, High End Watches for the quantity and value, as detailed above.
In view of the aforesaid, we are prima facie of the opinion, that there are enough reasons and evidence to believe that, the petitioner has committed offence punishable under Section 135 of the Customs Act, 1962 and the reasons for arrest being authorised by the competent officer and further approved by judicial orders passed by the learned Magistrate, procedure adopted by the Page 37 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined respondent No.3 can neither be said to be illegal nor in breach of the ratio laid down by the Hon'ble Apex Court in thecases of Arvind Kejriwal (Supr) and Radhika Agarwal (Supra).
12. We have perused the application at page-305 wherein the aforesaid is reiterated. Considering the grounds in the said application the competent officer has explained in detail the reasons for seeking petitioner's arrest. It is apposite to refer to paragraphs 8 to 15 which read thus :-
"8. It is respectfully submitted that during recording of the statements on dated 26.3.2025 inder cention 108 of the Customs Act, 1962 Shri Hema P Shah son of Shri Prakash Shah interalia stated that Shri Meghkumar Shah called him over phone and instructed him to take keys of the Flat No. 104, Avishkar Apartment, Nr. Mahalaxmi Temple, Paldi, Ahmedabad from his sister Mrs. Nili S. Sheth who lives in the same apartment at. 4th floor. Accordingly he received the key from Ms Nili S. Sheth and opened the gate of flat no. 104.It is important to mention that Despite her presence at the time of arrival of DRI and ATS officers at Avishkar Flat on dated. 17.3.2025, she did not directly come forward with the keys available with her and managed to produce the keys of the said locked flat through Shri Hemal Prakash Shah and almost after an considerable time period she approaches to the officer in between the ongoing search proceedings by simply introduced herself as sister of Shri Meghkumar Shah and joined the proceedings. Further, when she was asked if she has any knowledge about the documents relevant to it's purchase or relevant import documents in Page 38 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined respect to the foreign Gold Bars, Gold Bars, Jewellery, source of Cash recovered, High-end watches against which Ms Nili S Sheth informed that she did not have any idea about the same.
9. It is respectfully submitted that during recording of the Statements on dated 19.3.2025 under section 108 of the Customs Act, 1962 Mrs. Nili S Sheth, wife of Shri Siddharth Sheth, interalia stated that she did not know the exact date but the flat was rented 7 or 8 months back; she did not know the owner of the said flat and would provide the owner's address and mobile number in two days; his brother Mr. Meghkumar Mahendra Shah never gave her keys of the #flat No 104, Avishkar Apartment, Paldi, Ahmedabad. It is evident from the statement of Ms. Kalyaniben Vianybhai Sheth, owner of #Flat No. 104 that she had rented the flat to Mr Meghkumar Mahendra Shah before 3 to months back; she was knowing Ms Nili S.Sheth; Prior to allow Mr Meghkumar Mahendra Shah for renting, she had confirmed the facts from Ms Nili S.Sheth on phone. Further, it is also evident that Ms Nili S. Sheth had mobile number of Ms Kalyani V Sheth and also had shared the. same to his cousin Mr. Kevin Shah. It is also evident from the deposition of Shri Hemal Shah that keys of Flat No. 104 was given by Mrs Nili S. Sheth.
10. It is respectfully submitted that during the search proceedings on dated. 26.3.2025 carried out at the residence of Mrs. Nili [email protected]. 403, Aviskhar Appartment, his phone was found to be switched off and upon arrival at her place she informed to the officer that she had lost her phone in Auto Rickshaw.
11. It is respectfully submitted that Mrs. Nili S Sheth had been summoned for recording of her further statement on dated 24.03.2025, 26.03.2025 & 01.04.2025, 02.04.2025 for recording of statement u/s 108 of Customs Act, 1962. However, she did not joined the investigation and was absconding from then.
12 It is respectfully submitted that the co-conspirators Mr. Meghkumar Mahendrabhai Shah (brother) & Mr. Mahendrakumar Amrutlal Shah Page 39 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined (Father) of Mrs. Nili S Sheth were summoned for recording of their statement as well to produce the legitimate purchase/import documents in respect to the Gold Bars, Jewellery, High End Watched recovered from Flat No. Flat No. 104, Avishkar Apartment, Nr. Mahalaxmi Temple, Paldi, Ahmedabad, However they have chosen to abscond as well.
13. It is respectfully submitted that LOC was issued against her and accordingly, while attempting to go to Dubai from SVPI Airport on today i.e. 12.7.2025, immigration authority at SVPI Airport, intercepted Mrs. Nili S. Sheth and informed to this office. Accordingly, she was brought from SVPI airport upon isuance of summon dated, 12.7.2025.
14. It is respectfully submitted that statement recorded on dated 1207.2025 Mrs. Nili Sheth under the provision of Section 108 of the Customs Act, 1962, wherein she interlia stated that confirmed receipt of summons dated 26.03.2025, 01.04.2025 & 02.04.2025 but did not appear before the investigation agency as she was not feeling well as well as their family went for a spiritual trip, out of Ahmedabad; she has no link in the case being investigated by DRI, hence she did not attend the inquiry for statement; confirmed knowing Ms Kalyaniben Sheth, owner of Flat No. 104, Avishkar Flat, Paldi since last 3 year, who also belong to their community; she was to take a flight for Dubai from Ahmedabad SVPI Airport on 09:45 AM along with her family i.e. her mother, her son, her sister Ms Mili Sheth and her children for a leisure trip, via flight BK541 of Emirates; tickets for the said journey to dubai was booked by her through an agent through cash(Approx. Rs. 1.5 Lakh), however, she does not remember that who had provided the cash to the said agent; the said trip was planned and booked approx. 8 to 10 days before, However she does not remember that when and where she had paid the booking amount for the said trip; had planned to stay in the Hotel Fortune Pearl Hotel, Deira, Dubai; she has not any contact with her brother and her father and also does not know where are they both living now; Upon perusal of the statement dated Page 40 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined 21.03.2025 of Ms. Kalyani Ben, recorded under Section 108 of the Customs Act, 1962, she stated that she knows Ms. Kalyaniben Sheth,owner of flat no. 104 of Aviskar Apartment, Mahalxmi Society, Ahmedabad for the last three years; agreed with the facts mentioned in the statement Ms Kalyaniben and also agreed that she had transfer the rent amount through her Google pay UPI to Ms Kalyaniben; the rent of the said house i.e. 104 of Aviskar apartment was Rs. 22000/- per month; no rent deed was done against the renting of the said flat; had transfer the rent amount to Ms Kalayniben Sheth on account of the rent payments as per instruction of her father Shri Mahendra A Shah; she did not disclose the facts about knowing about the owner of the Flat No. 104@Avishkar, Paldi at that time of panchnama dated. 17-18.3.2025 as she was afraid from the inquiry; Ms Kalyaniben inquired from me about her brother and also her father asked her to paid the rent amount; did not agree with the facts mentioned in the statement of Shri Hemal P.Shah and she does not know the said person as she met to him only at the time of search proceeding being conducted on 17/18.03.2025;she did not handover the keys of the said flat to Shri Hemal. shah; she made some financial transaction with her father, as and when required; on being asked regarding some documents recovered during the panchnama proceedings on dated, 17-18.3.2025 where in her name i.e Sheth Nili Siddharth, her husbands' name i.e. Siddharth Mahendrakumar Sheth, her residential address i.e 403 Avishkar Apartments, 3 Mahalaxmi Society, her phone number i.e 9824445577, her photographs bearing remarks "Megh Apurva, Megh Appy", her email id [email protected], are figuring multiple times, that the said documents are related to her; she used to collect jewelry on instructions from her brother and father to further handover to them; her financial transactions are looked after by her father her father purchased the property worth of Rs.3,25,00,000/-in her name and on being asked regarding information as to how the payment was done in respect of the said property stated that her father must have paid for the same."Page 41 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025
NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined
15. In view of the above, it appears that Mrs. Nili S. Sheth, Sister of Mr. Meghkumar Mahendra Shah tried to Mis-lead/digrees the investigation and tried to hide the facts and thereby appears to be part of the syndicate involved in smuggling of contrabands and have knowingly concerned herself in the said act of smuggling of foreign origin gold as detailed below :-
Sr. Details of items PCS Purity Net Market value Tariff Value No. Weight in (Rs.) (Rs.) Gram 1 Gold Bars 882 999.0 88020.00 79,83,41,400/- 72,72,19,480/-
24 Kt 2 Gold Jewelry - - 19794.08 12,88,32,991/- -
3 Currency(INR) - - - 1,37,98,000/- -
4 Watches 10 - - 15,19,76,108/- -
5 Mobile Phone 1 - - 12,000/- -
6 Watch Belt 2 - 100.100 4,23,449/- -
Total 109,33,83,948/-
13. We deem it fit to refer to relevant provisions of the Customs Act, 1962 binding the parties which read thus :-
Section 2(39) of the Customs Act, 1962 :-
"smuggling", in relation to any goods, means any act or omission which will render such goods liable to confiscation under section 111 or section 113;"
Section 104 of the Customs Act, 1962 :-
"Section 104 : Power to arrest [(1) If an officer of customs empowered in this behalf by general or special order of the [Principal Commissioner of Customs or Page 42 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined Commissioner of Customs] has reason to believe that any person [xxx] has committed an offence punishable under section 132 or section 133 or section 135 or section 135A or section 136, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest.] (2) Every person arrested under sub-section (1) shall, without unnecessary delay, be taken to a magistrate.
(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 powers 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).
[(4) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), any offence relating to-
(a) prohibited goods; or
(b) evasion or attempted evasion of duty exceeding fifty lakh [rupees; or] [(c) fraudulently availing of or attempting to avail drawback or any exemption from duty provided under this Act, where the amount of drawback or exemption from duty exceeds fifty lakh rupees; or
(d) fraudulently obtaining an instrument for the purposes of this Act or the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992), and such instrument is utilised under this Act, where duty relatable to such utilisation of instrument exceeds fifty lakh rupees,] shall be Page 43 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined cognizable.
(5) Save as otherwise provided in sub-section (4), all other offences under the Act shall be non-cognizable. [(6) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), an offence punishable under section 135 relating to-
(a) evasion or attempted evasion of duty exceeding fifty lakh rupees; or
(b) prohibited goods notified under section 11 which are also notified under sub-clause (c) of clause (i) of sub- section (1) of section 135; or
(c) import or export of any goods which have not been declared in accordance with the provisions of this Act and the market price of which exceeds one crore rupees; or
(d) fraudulently availing of or attempt to avail of drawback or any exemption from duty provided under this Act, if the amount of drawback or exemption from duty exceeds fifty lakh [rupees; or] [(e) fradulently obtaining an instrument for the purposes of this Act or the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992), and such instrument is utilised under this Act, where duty relatable to such utilisation of instrument exceeds fifty lakh rupees,] shall be non-bailable.
(7) Save as otherwise provided in sub-section (6), all other offences under this Act shall be bailable.]] [Explanation : For the purposes of this section, the expression Page 44 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined "instrument" shall have the same meaning as assigned to it in Explanation 1 to section 28AAA.]"
Section 111 of the Customs Act, 1962 :-
"Section 111 : Confiscation of improperly imported goods, etc. The following goods brought from a place outside India shall be liable to confiscation:
(a) any goods imported by sea or air which are unloaded or attempted to be unloaded at any place other than a customs port or customs airport appointed under clause (a) of section 7 for the unloading of such goods;
(b) any goods imported by land or inland water through any route other than a route specified in a notification issued under clause (c) of section 7 for the import of such goods;
(c) any dutiable or prohibited goods brought into any bay, gulf, creek or tidal river for the purpose of being landed at a place other than a customs port;
(d) any goods which are imported or attempted to be imported or are brougnt within the Indian customs waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force;
(e) any dutiable or prohibited goods found concealed in any manner in any conveyance;
(f) any dutiable or prohibited goods required to be mentioned under the regulations in an [arrival manifest or import manifest] or import report which are not so mentioned;
(g) any dutiable or prohibited goods which are unloaded from a Page 45 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined conveyance in contravention of the provisions of section 32, other than goods inadvertently unloaded but included in the record kept under sub-section (2) of section 45;
(h) any dutiable or prohibited goods unloaded or attempted to be unloaded in contravention of the provisions of section 33 or section 34;
(i) any dutiable or prohibited goods found concealed in any manner in any package either before or after the unloading thereof;
(j) any dutiable or prohibited goods removed or attempted to be removed from a customs area or a warehouse without the permission of the proper officer or contrary to the terms of such permission;
(k) any dutiable or prohibited goods imported by land in respect of which the order permitting clearance of the goods required to be produced under section 109 is not produced or which do not correspond in any material particular with the specification contained therein;
(l) any dutiable or prohibited goods which are not included or are in excess of those included in the entry made under this Act, or in the case of baggage in the declaration made under section 77;
(m) [any goods which do not correspond in respect of value or in any other particular] with the entry made under this Act or in the case of baggage with the declaration made under section 77 [in respect thereof, or in the case of goods under transhipment, with the declaration for transhipment referred to in the proviso to sub-section (1) of section 54;]
(n) any dutiable or prohibited goods transited with or without transhipment or attempted to be so transited in contravention of the provisions of Chapter VIII;
(o) any goods exempted, subject to any condition, from duty or any prohibition in respect of the import thereof under this Act or any other Page 46 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined law for the time being in force, in respect of which the condition is not observed unless the non-observance of the condition was sanctioned by the proper officer;
[(p) any notified goods in relation to which any provisions of Chapter IVA or of any rule made under this Act for carrying out the purposes of that Chapter have been contravened;] [(q) any goods imported on a claim of preferential rate of duty which contravenes any provision of Chapter VAA or any rule made thereunder.]. "
Section 123 of the Customs Act, 1962 :-
"Section 123 : Burden of proof in certain cases (1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be-
(a) in a case where such seizure is made from the possession of any person,
(i) on the person from whose possession the goods were seized; and
(ii) if any person, other than the person from whose possession the goods were seized, claims to be the owner thereof, also on such other person;
(b) in any other case, on the person, if any, who claims to be the owner of the goods so seized.
(2) This section shall apply to gold [and manufactures thereof,] watches, and any other class of goods which the Central Govt, may by notification in the Official Gazette specify."Page 47 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025
NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined Section 135 of the Customs Act, 1962 :-
"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 mis-declaration of value or in any fraudulent evasion or attempt at evasion of any duty chargeable thereon or of any prohibition for the time being imposed under this Act or any other law for the time being in force with respect to such goods; or
(b) 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; or] [(e) obtains an instrument from any authority by fraud, collusion, wilful misstatement or suppression of facts and such instrument has been utilised by such person or any other person,] Page 48 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined he shall be punishable,-
(i) in the case of an offence relating to,-
(A) any goods the market price of which exceeds one crore of rupees; or (B) the evasion or attempted evasion of duty exceeding [fifty lakh] of rupees; or (C) such categories of prohibited goods as the Central Government may, by notification in the Official Gazette, specify; or (D) fraudulently availing of or attempting to avail of drawback or any exemption from duty referred to in clause (d), if the amount of drawback or exemption from duty exceeds [fifty lakh] [of rupees; or] [(E) obtaining an instrument from any authority by fraud, collusion, wilful misstatement or suppression of facts and such instrument has been utilised by any person, where the duty relatable to utilisation of the instrument exceeds fifty lakh 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 less than one year;
(ii) in any other case, with imprisonment for a term which may textend to three years, or with fine, or with both.] [(2) If any person convicted of an offence under this section or Page 49 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined under sub-section (1) of section 136 is again convicted of an offence under this section, then, he shall be punishable for the second and for every subsequent offence with imprisonment for a term which may extend to seven years and with fine:
PROVIDED that in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court such imprisonment shall not be for less than [one year].
(3) For the purposes of sub-sections (1) and (2), the following shall not be considered as special and adequate reasons for awarding a sentence of imprisonment for a term of less than 2[one year], namely:-
(i) the fact that the accused has been convicted for the first time for an offence under this Act;
(ii) the fact that in any proceeding under this Act, other than a prosecution, the accused has been ordered to pay a penalty or the goods which are the subject matter of such proceedings have been ordered to be confiscated or any other action has been taken against him for the same act which constitutes the offence;
(iii) the fact that the accused was not the principal offender and was acting merely as a carrier of goods or otherwise was a secondary party to the commission of the offence;
(iv) the age of the accused.] [Explanation: For the purposes of this section, the expression "instrument" shall have the same meaning as assigned to it in the Explanation 1 to Page 50 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined section 28AAA.]"
Thus, Section 135(1)(b) provides that, whoever 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.
14. We further deem it fit to refer to the position of law binding the parties which reads thus :-
(A) The decision in the case of Arvind Kejriwal vs. Directorate of Enforcement, reported in (2025) 2 SCC 248, paragraphs 27, 37, 41 to 44 61 to 64 which read thus :-
"27. In the present case, we are examining Section 19(1) of the PML Act and the rights of the accused. We are not concerned with the ECIR. The relevant question arising is - whether the arrestee is entitled to be supplied with a copy of the "reasons to believe"? Paragraph 89 in Vijay Madanlal Choudhary (supra) refers to the importance of recording the "reasons to believe" in writing, and states this is mandatory. Further, both Pankaj Bansal (supra) and Prabir Purkayastha (supra) hold that the failure to record "reasons to believe" in writing will result in the arrest being rendered illegal Page 51 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined and invalid. Paragraph 131 of Vijay Madanlal Choudhary (supra), which has been quoted subsequently, states that Section 19(1) requires in-depth scrutiny by the designated officer. A higher threshold is required for making an arrest, necessitating a review of the material available to demonstrate the persons guilt. Production of the "reasons to believe" before the Special Court/magistrate, cannot be construed and is not the same as furnishing or providing the "reasons to believe" to the arrestee who has a right to challenge his arrest in violation of Section 19(1) of the PML Act.
37. Accordingly, in Barium Chemicals Ltd. (supra), it was held that the expression "reason to believe" is not a subjective process altogether, not lending itself even to a limited scrutiny of the court that such "reason to believe" or opinion is not formed on relevant facts or within the limits.
41. Once we hold that the accused is entitled to challenge his arrest under Section 19(1) of the PML Act, the court to examine the validity of arrest must catechise both the existence and soundness of the "reasons to believe", based upon the material available with the authorised officer. It is difficult to accept that the "reasons to believe", as recorded in writing, are not to be furnished. As observed above, the requirements in Section 19(1) are the jurisdictional conditions to be satisfied for arrest, the validity of which can be challenged by the accused and examined by the court. Consequently, it would be incongruous, if not wrong, to hold that the accused can be denied and not furnished a copy of the "reasons to believe". In reality, this would effectively prevent the accused from challenging their arrest, questioning the Page 52 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined "reasons to believe". We are concerned with violation of personal liberty, and the exercise of the power to arrest in accordance with law. Scrutiny of the action to arrest, whether in accordance with law, is amenable to judicial review. It follows that the "reasons to believe" should be furnished to the arrestee to enable him to exercise his right to challenge the validity of arrest.
42. We would accept that in a one-off case, it may not be feasible to reveal all material, including names of witnesses and details of documents, when the investigation is in progress. This will not be the position in most cases. DoE may claim redaction and exclusion of specific particulars and details. However, the onus to justify redaction would be on the DoE. The officers of the DoE are the authors of the "reasons to believe" and can use appropriate wordings, with details of the material, as are necessary in a particular case. As there may only be a small number of cases where redaction is justified for good cause, this reason is not a good ground to deny the accuseds access to a copy of the "reasons to believe" in most cases. Where the non-disclosure of the "reasons to believe" with redaction is justified and claimed, the court must be informed. The file, including the documents, must be produced before the court. Thereupon, the court should examine the request and if they find justification, a portion of the "reasons to believe" and the document may be withheld. This requires consideration and decision by the court. DoE is not the sole judge.
43. Section 173(6) of the Code, permits the police officer not to furnish statements or make disclosures to the accused when it is inexpedient in public interest. In such an event, the police officer is to indicate the specific part of the statement and append a note Page 53 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined requesting the magistrate to exclude that part from the copy given to the accused. He has to state the reasons for making such request. The same principle will apply.
44. We now turn to the scope and ambit of judicial review to be exercised by the court. Judicial review does not amount to a mini- trial or a merit review. The exercise is confined to ascertain whether the "reasons to believe" are based upon material which establish that the arrestee is guilty of an offence under the PML Act. The exercise is to ensure that the DoE has acted in accordance with the law. The courts scrutinize the validity of the arrest in exercise of power of judicial review. If adequate and due care is taken by the DoE to ensure that the "reasons to believe"
justify the arrest in terms of Section 19(1) of the PML Act, the exercise of power of judicial review would not be a cause of concern. Doubts will only arise when the reasons recorded by the authority are not clear and lucid, and therefore a deeper and in- depth scrutiny is required. Arrest, after all, cannot be made arbitrarily and on the whims and fancies of the authorities. It is to be made on the basis of the valid "reasons to believe", meeting the parameters prescribed by the law. In fact, not to undertake judicial scrutiny when justified and necessary, would be an abdication and failure of constitutional and statutory duty placed on the court to ensure that the fundamental right to life and liberty is not violated.
61. The legality of the "reasons to believe" have to be examined based on what is mentioned and recorded therein and the material on record. However, the officer acting under Section 19(1) of the Page 54 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined PML Act cannot ignore or not consider the material which exonerates the arrestee. Any such non-consideration would lead to difficult and unacceptable results. First, it would negate the legislative intent which imposes stringent conditions. As a general rule of interpretation, penal provisions must be interpreted strictly. Secondly, any undue indulgence and latitude to the DoE will be deleterious to the constitutional values of rule of law and life and liberty of persons. An officer cannot be allowed to selectively pick and choose material implicating the person to be arrested. They have to equally apply their mind to other material which absolves and exculpates the arrestee. The power to arrest under Section 19(1) of the PML Act cannot be exercised as per the whims and fancies of the officer.
62. Undoubtedly, the opinion of the officer is subjective, but formation of opinion should be in accordance with the law. Subjectivity of the opinion is not a carte blanche to ignore relevant absolving material without an explanation. In such a situation, the officer commits an error in law which goes to the root of the decision making process, and amounts to legal malice.
63. A contention raised by the DoE, and accepted in Vijay Madanlal Choudhary (supra), was that the order of arrest under Section 19(1) of the PML Act is a decision taken by a high ranking officer. Thus, it is expected that the high ranking officer is conscious of the obligation imposed by Section 19(1) of the PML Act before passing an order of arrest. We are of the opinion that it would be incongruous to argue that the high ranking officer should not objectively consider all material, including exculpatory material. Page 55 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025
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64. A wrong application of law or arbitrary exercise of duty leads to illegality in the process. The court can exercise their judicial review to strike down such a decision. This would not amount to judicial overreach or interference with the investigation, as has been argued by the DoE. The court only ensures that the enforcement of law is in accordance with the statute and the Constitution. An adverse decision would only help in ensuring better compliance with the statute and the principles of the Constitution." (B) The decision in the case of Radhika Agarwal vs. Union of India, reported in 2025 SCC Online 449, paragraphs 30 to 38 and 42 to 47, (Coram : Per Hon'ble Justice Bela M Trivedi, J) paragraphs 4, 6 to 13 which read thus :-
"30.Arvind Kejriwal v. Enforcement Directorate [(2025) 2 SCC 248; 2024 SCC OnLine SC 1703.] , a recent judgment authored by one of us (Sanjiv Khanna, J.), is a dictum relating to the Prevention of Money Laundering Act, 2002 [ For short, "the PML Act".] . This court held that the power of arrest granted to the Directorate of Enforcement [ For short, "the DoE".] under section 19 of the PML Act is fenced with certain pre-conditions. These pre-conditions act as stringent safeguards to protect the life and liberty of individuals. The relevant portion reads [ Pages 262 and 263 in SCC.] :
"9. A bare reading of the section reflects, that while the Legislature has given power to the Director, Deputy Director, Assistant Director, or an authorised officer to arrest a person, it is fenced with preconditions and requirements, which must be satisfied prior to the arrest of a person. The conditions are:Page 56 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025
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(i) The officer must have material in his possession.
(ii) On the basis of such material, the authorised officer should form and record in writing, 'reasons to believe' that the person to be arrested, is guilty of an offence punishable under the PML Act.
(iii) The person arrested, as soon as may be, must be informed of the grounds of arrest.
These preconditions act as stringent safeguards to protect life and liberty of individuals. We shall subsequently interpret the words 'material', 'reason to believe', and 'guilty of the offence'. Before that, we will refer to some judgments of this court on the importance of section 19(1) and the effect on the legality of the arrest upon failure to comply with the statutory requirements."
31. In Arvind Kejriwal [(2025) 2 SCC 248; 2024 SCC OnLine SC 1703.] , a combined reading of Pankaj Bansal v. Union of India [(2024) 7 SCC 576; 2023 SCC OnLine SC 1244.] , Prabir Purkayastha v. State (NCT of Delhi) [(2024) 8 SCC 254; (2024) 3 SCC (Cri) 573; 2024 SCC OnLine SC 934.] and Vijay Madanlal Choudhary v. Union of India [(2023) 21 ITR-OL 1 (SC); (2023) 12 SCC 1; 2022 SCC OnLine SC 929.] was adopted by this court. It was held that the power to arrest a person without a warrant and without instituting a criminal case is a drastic and extreme power. Therefore, the Legislature had prescribed safeguards in the language of section 19 itself which act as exacting conditions as to how and when the power is exercisable. These safeguards include the requirement to have "material" in the possession of DoE, and on the basis of such "material",the authorised officer must form an opinion and record in writing their "reasons to believe" that the person arrested was "guilty" of an offence punishable under the PML Act. The "grounds of arrest" are also required to be informed forthwith to the person arrested.
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32. The contention of the DoE that while "grounds of arrest" were mandatorily required to be supplied to the arrestee, "reasons to believe",being an internal and confidential document, need not be disclosed, was decisively rejected in Arvind Kejriwal [Arvind Kejriwal v. Enforcement Directorate, (2025) 2 SCC 248; 2024 SCC OnLine SC 1703.] . It was held that "reasons to believe" are to be furnished to the arrestee such that they can challenge the legality of their arrest. Exceptions are available in one-off cases where appropriate redactions of "reasons to believe" are permissible. The relevant portion reads [ Pages 278 and 279 in SCC] :
"41. Once we hold that the accused is entitled to challenge his arrest under section 19(1) of the PML Act, the court to examine the validity of arrest must catechise both the existence and soundness of the 'reasons to believe', based upon the material available with the authorized officer. It is difficult to accept that the 'reasons to believe', as recorded in writing, are not to be furnished. As observed above, the requirements in section 19(1) are the jurisdictional conditions to be satisfied for arrest, the validity of which can be challenged by the accused and examined by the court. Consequently, it would be incongruous, if not wrong, to hold that the accused can be denied and not furnished a copy of the 'reasons to believe'. In reality, this would effectively prevent the accused from challenging their arrest, questioning the 'reasons to believe'. We are concerned with violation of personal liberty, and the exercise of the power to arrest in accordance with law. Scrutiny of the action to arrest, whether in accordance with law, is amenable to judicial review. It follows that the 'reasons to believe' should be furnished to the arrestee to enable him to exercise his right to challenge the validity of arrest.
42. We would accept that in a one-off case, it may not be feasible to reveal all material, including names of witnesses and details of documents, when the investigation is in progress. This will not be the position in most cases. DoE may claim redaction and exclusion of specific particulars and details. However, the onus to justify redaction would be on the DoE. The officers of the DoE are the authors of the 'reasons to believe' and can use Page 58 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined appropriate wordings, with details of the material, as are necessary in a particular case. As there may only be a small number of cases where redaction is justified for good cause, this reason is not a good ground to deny the accused's access to a copy of the 'reasons to believe' in most cases. Where the nondisclosure of the 'reasons to believe' with redaction is justified and claimed, the court must be informed. The file, including the documents, must be produced before the court. Thereupon, the court should examine the request and if they find justification, a portion of the 'reasons to believe' and the document may be withheld. This requires consideration and decision by the court. DoE is not the sole judge.
43. Section 173(6) of the Code, permits the police officer not to furnish statements or make disclosures to the accused when it is inexpedient in public interest. In such an event, the police officer is to indicate the specific part of the statement and append a note requesting the Magistrate to exclude that part from the copy given to the accused. He has to state the reasons for making such request. The same principle will apply."
33.Arvind Kejriwal [Arvind Kejriwal v. Enforcement Directorate, (2025) 2 SCC 248; 2024 SCC OnLine SC 1703.] also holds that the courts can judicially review the legality of arrest. This power of judicial review is inherent in section 19 as the Legislature has prescribed safeguards to prevent misuse. After all, arrests cannot be made arbitrarily on the whims and fancies of the authorities. This judicial review is permissible both before and after criminal proceedings or prosecution complaints are filed.
34. On the nature of "material" examined by the DoE, Arvind Kejriwal [Arvind Kejriwal v. Enforcement Directorate, (2025) 2 SCC 248; 2024 SCC OnLine SC 1703.] states that such "material" must be admissible before a court of law. This is because the designated officer is required to arrive at a conclusion of guilt based on the "material" examined and such guilt can only be based on admissible Page 59 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined evidence. The relevant portion reads [ Pages 280 and 281 in SCC.] :
"47. DoE has drawn our attention to the use of the expression 'material in possession' in section 19(1) of the PML Act instead of 'evidence in possession'. Though etymologically correct, this argument overlooks the requirement that the designated officer should and must, based on the material, reach and form an opinion that the arrestee is guilty of the offence under the PML Act. Guilt can only be established on admissible evidence to be led before the court, and cannot be based on inadmissible evidence. While there is an element of hypothesis, as oral evidence has not been led and the documents are to be proven, the decision to arrest should be rational, fair and as per law. Power to arrest under section 19(1) is not for the purpose of investigation. Arrest can and should wait, and the power in terms of section 19(1) of the PML Act can be exercised only when the material with the designated officer enables them to form an opinion, by recording reasons in writing that the arrestee is guilty."
35. The investigating officer is also required to look at the whole material and cannot ignore material that exonerates the arrestee. A wrong application of law or arbitrary exercise of duty by the designated officer can lead to illegality in the process. The court can exercise judicial review to strike down such a decision. Referring to errors in the decision-making process, Arvind Kejriwal [Arvind Kejriwal v. Enforcement Directorate, (2025) 2 SCC 248; 2024 SCC OnLine SC 1703.] records how such errors can vitiate the judgment or decision of the statutory authority. The relevant portion reads [ Page 292 and 293 in SCC.] :
"67. Error in decision-making process can vitiate a judgment/decision of a statutory authority. In terms of section 19(1) of the PML Act, a decision-making error can lead to the arrest and deprivation of liberty of the arrestee. Though not akin to preventive detention cases, but given the nature of the order entailing arrest--it requires careful scrutiny and consideration.Page 60 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025
NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined Yet, at the same time, the courts should not go into the correctness of the opinion formed or sufficiency of the material on which it is based, albeit if a vital ground or fact is not considered or the ground or reason is found to be non-existent, the order of detention may fail.
68. In Centre for PIL v. Union of India [(2011) 4 SCC 1; (2011) 1 SCC (L&S) 609; 2011 SCC OnLine SC 425.] , this court observed that in judicial review, it is permissible to examine the question of illegality in the decision-making process. A decision which is vitiated by extraneous considerations can be set aside. Similarly, in Uttamrao Shivdas Jankar v. Ranjitsinh Vijaysinh Mohite Patil [(2009) 13 SCC 131; 2009 SCC OnLine SC 1172.] , elaborating on the expression 'decision-making process', this court held that judicial interference is warranted when there is no proper application of mind on the requirements of law. An error in the decision-making process crops up where the authority fails to consider a relevant factor and considers irrelevant factors to decide the issue."
36. On the extent of judicial review available with the court, viz., "reasons to believe",it was held that judicial review cannot amount to a merits review. The exercise is confined to ascertain if, based upon "material" in possession of the DoE, the DoE had "reasons to believe" that the arrestee is guilty of an offence under the PML Act. The relevant portion reads [ Page 280 in SCC.] :
"44. We now turn to the scope and ambit of judicial review to be exercised by the court. Judicial review does not amount to a mini-trial or a merit review. The exercise is confined to ascertain whether the 'reasons to believe' are based upon material which 'establish' that the arrestee is guilty of an offence under the PML Act. The exercise is to ensure that the DoE has acted in accordance with the law. The courts scrutinize the validity of the arrest in exercise of power of judicial review. If adequate and due care is taken by the DoE to ensure that the 'reasons to believe' justify the arrest in terms of section 19(1) of the PML Act, the exercise of power of judicial review would not be a cause of concern. Doubts will only arise when the reasons recorded by the authority are not clear and lucid, and therefore a deeper and in-depth scrutiny is required. Arrest, after all, Page 61 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined cannot be made arbitrarily and on the whims and fancies of the authorities. It is to be made on the basis of the valid 'reasons to believe', meeting the parameters prescribed by the law. In fact, not to undertake judicial scrutiny when justified and necessary, would be an abdication and failure of constitutional and statutory duty placed on the court to ensure that the fundamental right to life and liberty is not violated."
37. On the different facets of judicial review available with the court while examining the legality of arrests, Arvind Kejriwal [Arvind Kejriwal v. Enforcement Directorate, (2025) 2 SCC 248; 2024 SCC OnLine SC 1703.] states [ Pages 291 and 292 in SCC.] :
"65.... We have already referred to the contours of judicial review expounded in Padam Narain Aggarwal [Union of India v. Padam Narain Aggarwal, (2008) 13 SCC 305; (2009) 1 SCC (Cri) 1; 2008 SCC OnLine SC 1500.] and Dr. Partap Singh [Dr. Partap Singh v. Director of Enforcement, (1985) 155 ITR 166 (SC); (1985) 58 Comp Cas 477 (SC); (1985) 3 SCC 72; 1985 SCC (Cri) 312; 1985 SCC (Tax) 352; 1985 SCC OnLine SC 16.] . We have also referred to the principles of Wednesbury [Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn., [1948] 1 K.B. 223.] reasonableness.
66. In Amarendra Kumar Pandey v. Union of India [2022 SCC OnLine SC 881.] , this court elaborated on the different facets of judicial review regarding subjective opinion or satisfaction. It was held that the courts should not inquire into correctness or otherwise of the facts found except where the facts found existing are not supported by any evidence at all or the finding is so perverse that no reasonable man would say that the facts and circumstances exist. Secondly, it is permissible to inquire whether the facts and circumstances so found to exist have a reasonable nexus with the purpose for which the power is to be exercised. In simple words, the conclusion has to logically flow from the facts. If it does not, then the courts can interfere, treating the lack of reasonable nexus as an error of law. Thirdly, jurisdictional review permits review of errors of law when constitutional or statutory terms, essential for the exercise of power, are misapplied or misconstrued. Fourthly, judicial review is permissible to check improper exercise of power. For instance, it is an improper exercise of power when the power is Page 62 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined not exercised genuinely, but rather to avoid embarrassment or for wreaking personal vengeance. Lastly, judicial review can be exercised when the authorities have not considered grounds which are relevant or has accounted for grounds which are not relevant."
38.Arvind Kejriwal [Arvind Kejriwal v. Enforcement Directorate, (2025) 2 SCC 248; 2024 SCC OnLine SC 1703.] also refers to the doctrine of proportionality, which has come to permeate constitutional law when questions of life and liberty are involved [The doctrine of proportionality has been expounded by this court in a line of decisions, including the recent judgment of Association for Democratic Reforms v. Union of India, (2024) 243 Comp Cas 115 (SC); (2024) 5 SCC 1; 2024 SCC OnLine SC 150; 2024 INSC 113. It comprises four prongs--(i) legitimate aim/purpose--The first step is to examine whether the act/measure restricting the fundamental right has a legitimate aim and/or purpose; (ii) rational connection-- The second step is to examine whether the restriction has rational connection with the aim; (iii) minimal impairment/necessity test-- The third step is to examine whether there should have been a less restrictive alternate measure that is equally effective; and (iv) balancing stage--The last stage is to strike an appropriate balance between the fundamental right and the pursued public purpose.] . Courts may employ this four-part doctrinal test in their examination of the legality of arrest as arrest often involves contestation between the fundamental right to life and liberty of individuals against the public purpose of punishing the guilty.
42. The Code also uses the terms interchangeably. For instance, section 173 of the Code, relating to filing of a chargesheet, stipulates in sub-section (2)(i)(d) that the police officer must state in the chargesheet, "whether any offence appears to have been Page 63 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined 'committed' and, if so, by whom".Would this then mean that chargesheet, a prosecution document based on which a court takes cognisance of a matter, does not relate to the guilt of a person ? Naturally, such an interpretation would lead to anomalous circumstances and hence cannot be sustained.
43. Secondly, the fact that section 104(1) does not explicitly require a customs officer to have "material in their possession" does not imply that a customs officer can conclude that an offence has been committed out of thin air or mere suspicion. The threshold for arrest under section 104(1) of the Customs Act is higher than that under section 41 of the Code. Section 41 allows the police to arrest a person without a warrant, if a "reasonable complaint has been made",or "credible information has been received",or "a reasonable suspicion exists" that the person has committed a cognizable offence. In contrast, section 104(1) sets a higher threshold, stipulating that a customs officers may only arrest a person if they have "reasons to believe" that a person has committed an offence. A person is said to have a "reason to believe" a thing, if they have sufficient cause to believe that thing but not otherwise [ See section 26 of the Penal Code, 1860.] . This represents a more stringent standard than the "mere suspicion" threshold provided under section 41.
44. Thirdly, given the framework of the Customs Act, which explicitly classifies offences into bailable and non-bailable, as well as cognizable and non-cognizable, the "reasons to believe" must reflect these classifications when justifying an arrest. The reasoning must weigh in why an arrest is being made in a specific case, particularly given the specific severity assigned to the offence by the Legislature. The reasoning must also state how the monetary Page 64 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined thresholds outlined in the Act are met. Sub-clauses (b) to (d) of section 104(4) provide monetary thresholds for cognizable offences, while sub-clauses (a) and (c) to (e) of section 104(6) provide those for non-bailable offences. The "reasons to believe" must include a computation and/or an Explanation, based on factors such as the goods seized, from which a conclusion of guilt can be drawn. This level of detail is crucial, as it facilitates judicial review of the exercise of the power to arrest. The Department's authority to arrest under section 104 hinges on satisfying these statutory thresholds.
45. Moreover, the framework of the Customs Act clearly reflects the legislative intent to establish a distinct and unique procedure for the exercise of arrest powers by a customs officer. For example, section 104(4), specifies only four categories of offences as cognizable, outlined under sub-sections (a) to (d). Section 104(5) clarifies that all other offences under the Customs Act are non-cognizable in nature, meaning that arrests for these offences cannot be made without a warrant. We have cautioned in Arvind Kejriwal [Arvind Kejriwal v. Enforcement Directorate, (2025) 2 SCC 248; 2024 SCC OnLine SC 1703.] how the unbridled exercise of the power to arrest without a warrant can result in arbitrariness and errors in decision making process. A similar error made by a customs officer can lead to a frustration of the constitutional and statutory rights of the arrestee.
46. For the aforesaid reasons, we do not find any inconsistency between section 19(1) of the PML Act and section 104(1) of the Customs Act. We are of the opinion that principles and ratio developed in the case of Arvind Kejriwal [Arvind Kejriwal v. Enforcement Directorate, (2025) 2 SCC 248; 2024 SCC OnLine SC 1703.] , and the principles specifically discussed and delineated in Page 65 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined paragraphs 30 to 45 of this judgment, are equally applicable to the power of arrest under section 104 of the Customs Act. The respondent authorities are, therefore, directed to comply with the mandate of this judgment and that of Arvind Kejriwal [Arvind Kejriwal v. Enforcement Directorate, (2025) 2 SCC 248; 2024 SCC OnLine SC 1703.] .
47. Lastly, section 104(1) requires that a person arrested as soon as may be is required to be informed of the grounds of such arrest. The grounds of arrest must be given in writing to the arrestee before he is produced before the Magistrate in terms of section 104(2). This is necessary as it enables the accused to contest and challenge his arrest and seek bail from the court. To deny and not give the grounds in writing would be to deprive the accused of his right in terms of section 104(1) and also to seek right of bail under the provisions of the Code. This interpretation would be in consonance with article 22(1) of the Constitution which states that no person who is arrested shall be detained in custody without being informed as soon as may be of the grounds of such arrest, nor shall such arrest be denied the right to consult and to be defended by a legal practitioner of his choice. Per : Justice Bela M. Trivedi
4. Whenever the jurisdiction of the High Court or the Supreme Court is invoked under article 226 or article 32 as the case may be, challenging the punitive or preventive detention, the court is expected to take into consideration the nature of right infringed, the scope and object of the legislation under which such arrest or detention is made, the need to balance the rights and interests of the individual as against those of the society, the circumstances Page 66 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined under which and the persons by whom the jurisdiction is invoked, etc. In exercise of their discretionary jurisdiction, the High Courts and the Supreme Court do not, as courts of appeal or revision, correct errors of law or of facts. The judicial intervention is warranted only in exceptional circumstances when the arrest is prima facie found to be mala fide; or is prompted by extraneous circumstances, or is made in contravention of or in breach of provisions of the concerned statute; or when the authority acting under the concerned statute does not have the requisite authority, etc.
6. The safeguards provided in the Special Acts against the arrest of a person, are provided keeping in view the fundamental rights of life and personal liberty of a person enshrined in the Constitution of India. It cannot be gainsaid that such safeguards provided against the arrest of a person under the Special Acts or the Code of Criminal Procedure, must be observed not only to protect his fundamental right of personal liberty but also to prevent a potential misuse of the power to arrest a person at the instance of the authorized officer. The safeguards are--the requirement to have "material" in possession of the authorized officer, to form an opinion and record in writing the "reasons to believe" that the person arrested is guilty of an offence or has committed an offence as the case may be, under the provisions of the concerned Act, and the requirement to inform the person arrested, as soon as may be, of the grounds of arrest. As per article 21 of the Constitution, no person could be deprived of his life or personal liberty except according to procedure established by law. Since, the personal liberty of a person is deprived, when he is arrested, the procedure laid down in the statute while depriving his personal liberty, has to Page 67 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined be followed. Similarly, as per article 22(1) of the Constitution, no person who is arrested, could be detained in custody without being informed, as soon as may be, of the grounds for such arrest. Thus, the grounds for such arrest have to be communicated to him as soon as may be after the arrest is made. Tersely put, there has to be due compliance of the Constitutional and Statutory mandates, whenever an arrest is made of a person under the Special Acts.
7. So far as the arrest made under the Customs Act, 1962 is concerned, in Union of India v. Padam Narain Aggarwal [(2008) 13 SCC 305; (2009) 1 SCC (Cri) 1; 2008 SCC OnLine SC 1500.] , it has been observed that the power to arrest a person by a customs officer is statutory in character and cannot be interfered with. Such power of arrest can be exercised only in those cases where the customs officer has a reason to believe that the person is guilty of an offence punishable under the said Act. Thus, the power must be exercised on objective facts of commission of an offence enumerated, and when the customs officer has a reason to believe that the person sought to be arrested has been guilty of commission of such offences. It has been further observed that the law on one hand allows a customs officer to exercise power to arrest a person who has committed certain offences, and on the other hand takes due care to ensure individual freedom and liberty, by laying down norms and providing safeguards so that the power of arrest is not abused or misused by the authorities.
9. However, when the legality of such an arrest made under the Special Acts like PMLA, UAPA, Foreign Exchange, Customs Act, GST Acts, etc., is challenged, the court should be extremely loath in exercising its power of judicial review. In such cases, the exercise of Page 68 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined the power should be confined only to see whether the statutory and constitutional safeguards are properly complied with or not, namely, to ascertain whether the officer was an authorized officer under the Act, whether the reason to believe that the person was guilty of the offence under the Act, was based on the "material" in possession of the authorized officer or not, and whether the arrestee was informed about the grounds of arrest as soon as may be after the arrest was made. Sufficiency or adequacy of material on the basis of which the belief is formed by the officer, or the correctness of the facts on the basis of which such belief is formed to arrest the person, could not be a matter of judicial review.
10. It hardly needs to be reiterated that the power of judicial review over the subjective satisfaction or opinion of the statutory authority would have different facets depending on the facts and circumstances of each case. The criteria or parameters of judicial review over the subjective satisfaction applicable in service related cases, cannot be made applicable to the cases of arrest made under the Special Acts. The scrutiny on the subjective opinion or satisfaction of the authorized officer to arrest the person could not be a matter of judicial review, in as much as when the arrest is made by the authorized officer on he having been satisfied about the alleged commission of the offences under the Special Act, the matter would be at a very nascent stage of the investigation or inquiry. The very use of the phrase "reasons to believe" implies that the officer should have formed a prima facie opinion or belief on the basis of the material in his possession that the person is guilty or has committed the offence under the relevant Special Act. Sufficiency or adequacy of the material on the basis of which such belief is formed by the authorized officer, would not be a matter of Page 69 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined scrutiny by the courts at such a nascent stage of inquiry or investigation.
11. As held in Adri Dharan Das v. State of W.B. [(2005) 4 SCC 303; 2005 SCC (Cri) 933; 2005 SCC OnLine SC 357.] , ordinarily arrest is a part of the process of investigation intended to secure several purposes. The accused may have to be questioned in detail regarding various facets of motive, preparation, commission and aftermath of crime and the connection of other persons, if any, in the crime. There may be circumstances in which the accused may provide information leading to discovery of material facts. It may be necessary to curtail his freedom in order to enable the investigation to proceed without hindrance and to protect witnesses and persons connected with the victim of the crime, to prevent his disappearance, to maintain law and order in the society, etc. For these or such other reasons, arrest may become an inevitable part of the process of investigation.
12. It is pertinent to note that the Special Acts are enacted to achieve specific purposes and objectives. The power of judicial review in cases of arrest under such Special Acts should be exercised very cautiously and in rare circumstances to balance individual liberty with the interest of justice and of the society at large. Any liberal approach in construing the stringent provisions of the Special Acts may frustrate the very purpose and objective of the Acts. It hardly needs to be stated that the offences under the PMLA or the Customs Act or FERA are the offences of very serious nature affecting the financial systems and in turn the sovereignty and integrity of the nation. The provisions contained in the said Acts therefore must be construed in the manner which would enhance the objectives of the Acts, and not frustrate the same. Frequent or Page 70 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined casual interference of the courts in the functioning of the authorized officers who have been specially conferred with the powers to combat the serious crimes, may embolden the unscrupulous elements to commit such crimes and may not do justice to the victims, who in such cases would be the society at large and the nation itself. With the advancement in Technology, the very nature of crimes has become more and more intricate and complicated. Hence, minor procedural lapse on the part of authorized officers may not be seen with magnifying glass by the courts in exercise of the powers of judicial review, which may ultimately end up granting undue advantage or benefit to the person accused of very serious offences under the Special Acts. Such offences are against the society and against the nation at large, and cannot be compared with the ordinary offences committed against an individual, nor the accused in such cases be compared with the accused of ordinary crimes.
13. Though, the power of judicial review keeps a check and balance on the functioning of the public authorities and is exercised for better and more efficient and informed exercise of their powers, such power has to be exercised very cautiously keeping in mind that such exercise of power of judicial review may not lead to judicial overreach, undermining the powers of the statutory authorities. To sum up, the powers of judicial review may not be exercised unless there is manifest arbitrariness or gross violation or non-compliance of the statutory safeguards provided under the Special Acts, required to be followed by the authorized officers when an arrest is made of a person prima facie guilty of or having committed offence under the special Act."
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15. Harmoniously considering the facts, as referred to hereinabove, the provisions of law and positions of law, as referred to hereinabove, we pass the following order :-
16. Having considered the reasons to believe, the notes and submissions by the competent officer "for reasons to believe" to arrest the petitioner and the "grounds of arrest" as stated by the competent officer, prima facie the acts and commission of the petitioner are such that, she has concerned herself in the act of smuggling of gold, gold jewellery, high end watches, mobile phone and hoarding of cash currency which she knew were liable for confiscation under Section 111 of the Customs Act and liable to penalty under Section 112 of the Customs Act, 1962 and that, she too would be rendered liable for prosecution in terms of Section 135 of the Customs Act, 1962.
16.1 Further, considering the evidence on record, it also emerges that the petitioner herein who is the sister of Shri Meghkumar Shah and daughter of Shri Mahendrakumar Shah is trying to mislead or digress the investigation and trying to conceal the facts, in view thereof she appears to be a part of the syndicate involved Page 72 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined in smuggling of contrabands and has wilfully refused to part with the true information qua the subject goods to the tune of Rs.109,33,83,948/- which were confiscated . 16.2 No documents reflecting purchase or legitimate import in respect of recovered gold bars as well as high end watches which fall under the purview of Section 123 of the Customs Act have been produced by the petitioner before the competent authority, since, the onus to prove its legitimacy fell on the part of the owner, who had received or purchased such goods.
16.3 No documents in respect of the source of cash as well as jewellery recovered have been received by or produced before the competent authority.
16.4 Accordingly, the aforesaid contraband and the cash amount would be liable to confiscation under Section 111 of the Customs Act inviting penalty under Section 112 of the Customs Act, and the petitioner herein, would be rendered liable for prosecution in terms of Section 135 of the Customs Act, 1962 16.5 The petitioner's presence is necessary for the ongoing Page 73 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined investigation, failing which the main accused i.e. Shri Meghkumar Shah and Shri Mahendrakumar Shah would not be traced. The entire chain of events are such that the petitioner has not cooperated with the ongoing investigation and it was only because she was intercepted while undertaking international travel to Dubai that upon issuance of Look Out Circular by the competent authority in accordance with the applicable guidelines based on credible material indicating a likelihood of the petitioner to evade the law and booking air-tickets in cash wherein the petitioner herein failed to disclose material facts including the source of undisclosed cash used to book an international flight to Dubai. 16.6 In due compliance with the constitutional safeguard as provided under Article 15 of the Constitution of India the arrest of the petitioner is effected at 4: 50 p.m. which is well within the time frame on 12.7.2025. The same is effected by a woman officer in strict compliance under Section 104 of the Customs Act, 1962 as well as the applicable binding guidelines governing treatment of woman and Code of Criminal Procedure. The statements of the petitioner were recorded in presence of lady officer and under CCTV surveillance.
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17. It is the case of the petitioner herein that the respondents have failed to comply with the dictum of Arvind Kejriwal (Supra). In our opinion, the case of the petitioner herein falls within exception in paragraph-37 of the said judgment, where "reasons to believe"
cannot be furnished, as the present case is at the nascent and crucial stage of investigation, and the two main accused having absconded, who are none other than, her own brother and father.
The petitioner being an accomplice with these two absconding accused is writ large on the face of record of the case before us.
In view thereof any material in the nature of "reasons to believe"
that may be furnished to the petitioner in the present case would adversely affect the case of the prosecuting agency. In compliance of the ratio laid down by the Hon'ble Apex Court in the case of Arvind Kejriwal (Supra), the respondent No.3 has placed before us the "reasons to believe" to arrest the petitioner weighs with us.
18. In the facts of the present case, the petitioner had first hand access to gold and other materials in question, as she had rented the premises and was also paying rent of the said premises where the gold was stored and kept, and therefore, all the ingredients of Page 75 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined Section 135 of the Customs Act stand satisfied, as observed in paragraph 39 in case of Arvind Kejriwal (Supra). In the facts of the present case, the entire material on record is considered by the prosecution and from the record that is produced before us, there appears to be no selective pick and choose policy by the respondent No.3, so as to wrongfully implicate the petitioner. The opinion thus formed is in accordance with law. The grounds of arrest are in detail which disclose the entire material on record based on which, the arrest came to be ordered by the learned Additional Chief Judicial Magistrate by order dated 12.7.2025. 18.1 In our opinion, the subjective satisfaction arrived at by the competent officer is also in sync with the provisions of the Customs Act, 1962 having followed due procedure and guidelines in accordance with law considering the gravity of offence, continuous non-cooperation, risk of tampering the evidence and absconding.
The Hon'ble Apex Court in the case of Radhika Agarwal (Supra) has directed to follow the mandate of Arvind Kejriwal (Supra) and that, Section 104(1) of the Customs Act, 1962 requires that a person arrested as soon as possible is required to Page 76 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined be informed of the grounds of such arrest and that, the grounds of arrest must be given in writing to the arrestee before he is produced before the Magistrate in terms of Section 104(2) of the Customs Act, 1962 to enable him to contest and challenge the order of arrest and seek bail from the competent Court. The said interpretation being in consonance with Article 22(1) of the Constitution of India which states that, no person who is arrested shall be detained in custody without being informed as soon as may be of the grounds of such arrest, nor shall such arrestee be denied the right to consult and be defended by the legal practioner of his choice.
In the facts of the present case, the respondent authority has complied with the dictum of the aforesaid judgments.
It is also incorporated in the order passed by the learned Additional Chief Judicial Magistrate that, the petitioner/accused voluntarily stated that she had no complaint regarding any beating or complaint against the arresting officer or any other officer and was ordered to be taken into judicial custody.
19. In light of the aforesaid, the scope of habeas corpus petition Page 77 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined under Article 226 of the Constitution of India is to put the respondent to strict proof whether the detention is in accordance with law. If the detention is found to be illegal, the powers under Article 226 of the Constitution of India are to be exercised. In the fact of the present case, we have come to a conclusion that the respondent authority has invoked Section 104 of the Customs Act, 1962 for the "reasons to believe" that the petitioner has committed an offence punishable under Section 135(1) (b) and also punishable under Section 135(1)(i)(A) & (B) the Customs Act, 1962, which is cognizable under Section 104(4)(b) and the same beig non-bailable under Section 104(6)(a) & (c) of the Customs Act, 1962. Pursuant to formation of opinion for the purpose of arrest based on "reasons to believe" as required under the law and placing the same for consideration before this Court, the arrest of the petitioner being undertaken in strict compliance of the relevant provisions of the Custom Act as well as in accordance with the applicable procedures and guidelines laid down therein, is reflected from the record and proceedings of the case.
20. For the reasons, as referred hereinabove, we do not deem it fit to exercise extraordinary jurisdiction under Article 226 of the Page 78 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025 NEUTRAL CITATION R/SCR.A/9958/2025 JUDGMENT DATED: 22/07/2025 undefined Constitution of India so as to allow the prayers mentioned in para- 10 of the petition, consequently the present petition fails and the same stands dismissed.
The observations made in the present judgment are limited to the grievance raised in the present petition and the same would not be construed as findings on merits of the case.
21. After the order is passed, the learned advocate appearing for the petitioner submitted that, the petitioner be permitted to move application seeking bail.
22. Needless to say, it is always open for the petitioner to approach the competent Court seeking bail in accordance with law.
(VAIBHAVI D. NANAVATI,J) (UTKARSH THAKORBHAI DESAI, J) K.K. SAIYED Page 79 of 79 Uploaded by K.K. SAIYED(HC00169) on Tue Jul 29 2025 Downloaded on : Tue Jul 29 22:46:38 IST 2025