Delhi District Court
Cbi vs . Moti Lal Gupta & Ors. on 5 September, 2007
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IN THE COURT OF SH. KANWALJEET ARORA: ADDL. CHIEF
METROPOLITAN MAGISTRATE: DELHI
RC-16/85
CBI VS. MOTI LAL GUPTA & Ors.
ORDER
Shri S.R.Johr, Deputy Chief Controller of Imports and Exports, Office of Joint Chief Controller of Imports and Exports (CLA) New Delhi had filed the present complaint for proceeding against Moti Lal Gupta, Kanta Gupta of M/s. Kanta International and Shri P.R.Kwatre, Inspector of Textile Committee, Bombay for the offences u/s 120-B IPC read with sec. 420 IPC and sec. 5 of Imports and Exports (Control) Act, 1947 and also for the substantive offences u/s 420 IPC and sec. 5 of Imports and Exports (Control) Act, 1947.
2. Before proceeding to the facts which led the complainant to file the present complaint, it is pertinent to mention that criminal proceedings in this case were initiated against the accused persons on 11.01.1985 when RC No. 16/85 was registered by the CBI against M/s. Kanta International and others. It was the CBI who subsequently carried on with the investigations. On conclusion of investigations, CBI should have filed the charge sheet in the court, if it was of the opinion that any cognizable offence was committed by the accused persons, however, instead of filing the charge sheet, the papers of the investigations conducted by the CBI were handed over to the Office of Joint Chief Controller of Exports and Imports, New Delhi who as per the authorisation u/s 6 of the Imports and Exports (Control) Act, 1947, read with order No. 10/65, dated 01.12.1985 of Government of India, Ministry of Commerce, New Delhi had filed the present complaint against the accused persons for the offence punishable 2 u/s 5 of the Imports and Exports (Control) Act, 1947 for making false declaration with respect to the goods exported.
3. Facts emanated out of the complaint filed by the complainant makes it clear that during 1982, the export of readymade garments to Europeon Economic Community Countries including United Kingdom from India was governed by EEC Regulations of Brussels. As per Article 4 of EEC Regulations No. 2740/81, there was no quota for the export of handloom textile handicraft. However, the export of these handicrafts are required to be backed by "handloom certificate" issued by the competent authority i.e "Textile Committee of India". On the other hand, powerloom readymade garments were under quota restraints and only Export Promotion Council of India was authorised to issue export certificate for promoting the export of powerloom garments.
4. As per the provisions of Clause-3(1) of Export (Control) Order, 1977, no person can export any goods of the description specified in Schedule-1 except in accordance with the licence granted by Central Government, whereas as per sub clause-3(iii) of Export Control Order, 1977, the goods specified in Schedule-3 could be exported on fulfilment of terms and conditions specified therein. Handloom fabrics could have been exported to EEC countries being mentioned as item No. 55 in Schedule-3 (OGL-3). As per the conditions given, the handloom fabrics could be exported after obtaining the requisite inspection endorsement in "combination form" issued by the Textile Committee. In accordance with the export policy, Government of India had also announced the same vide public notice No. 61 ETC (PN) 81, dated 10.08.1981 deleniating the detailed procedure for issuance of the said certificate in respect of the quota items and non quota items to EEC countries.
5. The exporter at the time of export had to submit the application 3 alongwith invoice, a copy of the buyer's order, packing list etc., to the Textile Committee for inspection of the consignment declaring the origin of fabrics i.e whether it is a handloom product or a powerloom product. The Textile Committee then registers the same and appoints an Inspector for inspection of the consignment. The said Inspector then used to visit the premises so declared by the party and after inspection, he use to prepare an inspection report if the declaration is accepted by him. He also was required to make an endorsement on the "combination form" and on the basis of his report that the garments are of handloom origin, the handloom certificate is then issued by the Assistant Inspecting Officer. On the said certificate, the concerned officer was required to indicate EEC category number, Airway bill number, port of Shipment, destination, invoice number, FOB Value, GR-1 form and number and description of the garments. The packages inspected by the Textile Inspector were then sealed by the inspector with a number plier issued to him by the Department of Textile Committee.
6. It is the case of the complainant that M/s. Kanta International i.e accused No.4 which is a HUF concern of Moti Lal Gupta and Kanta Gupta are registered with the Apparels Export Promotion Council as a merchant exporter vide registration No. AEPC/REG/305/MER/O, dated 24.10.1981.
7. It is the case of the complainant that M/s. Kanta International i.e accused No.4 vide their application dated 08.01.1982 on strength of orders of M/s. Nylecharm Limited, U.K., requested the Textile Committee, New Delhi for inspection of 600 sets of ladies suits of cotton powerloom for FOB value of Rs. 31,500/- by dishonestly and fraudlently declaring them as of cotton handloom.
8. It is the case of the complainant that Shri P.R.Kwatre, the Textile Inspector was appointed by the Textile Committee for inspection of 4 these goods and he in collusion and conspiracy with M/s. Kanta International made endorsement on the "combination form" declaring the readymade as of handloom origin. On the basis of this inspection report, P.K.Mandal, Assistant Inspecting Officer (Textile Committee) issued "handloom certificate" as well as the certificate of origin No. 121027, dated 12.01.1982.
9. On the strength of this handloom certificate, these goods were presented to the custom clearing agent alongwith the shipping bill where the goods were examined by the Custom Inspector and the consignment was shipped by flight No. PK-273.
10. The importer M/s. Nylecharm Limited, UK had submitted the shipping documents with the licencing authority for receiving the consignment, however, the clearance of the consignment was not allowed by the custom authority, London on the grounds that the garments imported were of powerloom origin and not of handloom origin as declared on the shipping documents. It is the case of the complainant that the Custom and Excise (Investigations) London, had drawn the samples of the exported consignment in presence of textile consultant and textile expert of United Kingdom, which were also tested and were found to be of powerloom origin. It is stated that the samples drawn by United Kingdom (Customs) were sent to EEC Brussels through which the same were received by the Ministry of Commerce, Government of India, who got the same tested in Central Testing Laboratory, Textile Committee, Bombay which confirmed the readymade garments to be of powerloom origin.
11. Hence the present complaint was filed by the complainant alleging that the accused persons hatched a conspiracy in order to defraud the Government of India and made false declaration in the documents, obtained a false handloom certificate from the Textile Committee and 5 exported the non quota items depicting the same as quota items of handloom origin.
12. Pursuant to the filing of the complaint, accused persons were summoned to face trial. During the pendency of the proceedings, accused P.K.Kwatre, the Textile Inspector had filed a petition bearing Criminal M(M) 1872 and Criminal M No. 21038/94 before Hon'ble High Court for quashing the complaint. Hon'ble High Court vide orders dated 30.08.1994 had allowed the said petition and quashed the complaint so far as accused P.K.Kwatre is concerned on the grounds that the complaint is pending for over ten years and even the charges have not been framed. P.K.Kwatre was accordingly discharged from the case.
13. Complainant was called upon to substantiate the allegations levelled in the complaint by examining its witnesses. Despite grant of sufficient number of opportunities, complainant could examine only nine of its witnesses. Out of these nine witnesses, PW 6 S.R.Johr was the complainant and PW 9 H.R.Chopra, DSP, CBI was the Investigating Officer. Rest of the witnesses produced by CBI were formal witnesses only.
14. The stage of framing of charge in criminal trial is the most important stage where although as per the settled preposition of law, the material on record is not required to be meticulously seen. However, an embargo has been cast on the court which is required to see that there exists, a case from a prima facie point of view against the accused. The existence of prima facie case only authorises the court to proceed with the trial. Non application of mind at this stage can be detrimental to the interest of either of the party to the proceedings. As a wrongful discharge discourages the complainant and boosts the morale of the wrong doer, whereas the wrong framing of charge against the accused would force the 6 accused to undergo an ordeal of long drawn trial for no fault of his, which also undermines the majesty of law and weekens the faith of the litigants in the due process of law.
15. In the present case, the complainant at this stage was required to establish on record a proximate nexus between the accused persons so as to establish the Textile Inspector (who has already been discharge) had hatched a conspiracy with the main accused and had wrongly granted the certificate to the readymade garments to be that of handloom origin. For the purpose of that, the samples of the goods exported by M/s. Kanta International, India and imported by M/s. Nyalecharm, U.K. were required to be produced and proved in the court. However, none of the complainant witness appeared with the said samples. Although as per the case of the complainant, the samples from the imported goods at United Kingdom were drawn which infact were also sent to India through EEC, Brussels and were tested by the Laboratory of Textile Committee. However, neither the report of Central Testing Laboratory, Textile Committee was produced in the court and proved as per the provisions of Evidence Act nor any witness to that effect was produced by the CBI during the course of trial. Besides that, none of the witness who had either drawn the samples when the consignment reached at United Kingdom appeared to depose that the samples were so drawn and were tested to be of powerloom origin instead of handloom origin as declared in the shipping documents.
16. PW 1 Shri H.K.Kamal from AEPC appeared and stated that M/s. Kanta International is registered with AEPC and had declared the procedure required for the export of handloom quota items.
17. Shri P.C.Sethi, being a formal witness had proved the letter singed by him.
18. PW 3 Man Mohan Bhalla, Custom Superintendent appeared 7 and stated that at the time of the export goods were examined to be correct as per the shipping bill. He stated that no samples were drawn of the goods exported.
19. PW 4 Shri Desh Matter, appeared and stated that during the investigations, specimen signatures of Kanta Gupta were obtained.
20. PW 5 D.K.Chaudhary, Additional SP, CBI, who had partly investigated the case, stated that the Custom Authorities of United Kingdom had taken the samples of the goods exported by M/s. Kanta International and found the same to be of powerloom origin.
21. PW 7 also an officer from AEPC stated that M/s. Kanta International had submitted the shipping bill for the export of the goods.
22. PW 8 Milkhy Ram stated that the IO from CBI had taken into possession certain documents on which he proved the seizure memo EX.PW 8/A.
23. Complainant who appeared in the witness box as PW 6 stated that he on the basis of the documents produced before him which was investigated by CBI had filed his complaint which he proved as EX.PW 6/A, the IO H.R.Chopra was examined as PW 9 who proved the registration of the case as EX.PW 9/A and the seizure memo as EX.PW 9/2 to EX.PW 9/6 vide which the documents were taken into possession during the course of investigations.
24. As stated earlier, no witness was examined to prove the essential ingredients of the offence by the CBI. It is clearly evident not only on perusal of the complaint but also the evidence produced during the proceedings that there is not an iota of evidence to establish on record the offence of criminal conspiracy and cheating even from a prima facie point of view. It seems that the investigating agency was also of this opinion after conclusion of the investigations which perhaps was the reason with it 8 for not filing the charge sheet and handing over the investigations conducted by it, to the complainant who had then chosen to file the complaint for 'false declaration' u/s 5 of the Imports and Exports (Control) Act, 1947.
25. In view of the above, the case of the complainant falls not only on merits but also on the technical grounds, as sec. 5 of the Imports and Exports (Control) Act, 1947 is a non cognizable offence. CBI officer may, by virtue of notification issued by the Government, is empowered to investigate the case but in no eventuality, the mandatory provisions of sec. 155 Cr.PC, can be circumvented. In the present case, the IO of CBI had never taken permission of the court to investigate the offence under the Act which is the subject matter of the enquiry. SP for CBI was required to take permission of the court for investigations and thereafter he could have filed the charge sheet in the court instead of handing over the papers to the complainant for getting it filed through the present complaint filed by the complainant.
26. It was held in Rupin Deol Bajaj Vs. KPS Gill, 1996-Criminal Law Journal-381 by Hon'ble Supreme Court that where the allegations constitutes a non cognizable offence, no investigation is permitted by the police officer without an order of a Magistrate as contemplated u/s 155 (2) of the Code and such investigations, if carried out, would not be validated even by the orders of Magistrate obtained subsequently.
27. Keeping the aforementioned proposition of law in mind, I am of the considered opinion that the case filed by the complainant is not maintainable even on this technical ground beside the fact that on merit also, the complainant has failed to establish on record its case even from a prima facie point of view to proceed against the accused persons.
28. Having regard to these facts and circumstances, I am of the 9 considered opinion that the complainant has not been able to place on record sufficient evidence to proceed against the accused.
29. Accused Moti Lal Gupta and Kanta Gupta are accordingly discharged. Their bail bonds are cancelled and sureties are discharged.
30. File be consigned to Record Room.
Announced in open court (KANWALJEET ARORA)
Dated: 05.09.07 Addl. Chief Metropolican Magistrate
DELHI.
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