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Girdhari Lal Govinddas Agrawal Vs. Union of India and ors. - Court Judgment

LegalCrystal Citation
SubjectCustoms;Criminal
CourtDelhi High Court
Decided On
Case NumberCriminal Writ Appeal No. 13 of 1984
Judge
Reported in1985CriLJ1321; 1985(1)Crimes307; 26(1984)DLT203; 1984(18)ELT198(Del)
ActsForeign Exchange and Prevention of Smuggling Activities Act, 1974 - Sections 3; Customs Act, 1962 - Sections 11
AppellantGirdhari Lal Govinddas Agrawal
RespondentUnion of India and ors.
Advocates: Kapil Sibal,; U.K. Sharma,; Urmil Khanna,;
Cases ReferredState of Gujarat v. Adam Kasam Bhava
Excerpt:
.....from judicial scrutiny - detention order passed on rebuttable presumption of law formulated on basis of investigation by sponsoring authority - evidence on record proved that detention order passed in most casual and mechanical manner - detention order based on non-existing material - detention order quashed. - - on further investigation the petitioner bad successfully shown, living, the party which was said to be dead, though this party also has denied this particular transaction with the petitioner. (12) all these facts would clearly go to strengthen the suggestion of mr. handa has submitted that in the light of the well recognised rule that the court cannot go into the sufficiency or insufficiency of the material and if the court finds that the order has been passed by the..........silver bullion kept in an open garage where the aforesaid car had stopped. having hauled all the silver investigation regarding its ownership was conducted and it was found that some of the silver pieces seized in this case had the markings of m/s. national india bullion refinery, bombay, for short hereinafter called n.i.b.r. one shri durga dass mehra partner of m/s n.i.b.r. in his statement, inter alias stated that they do not maintain piecewise particulars of silver bullion pieces which weigh less than i kg. and as such it was not possible to ascertain the parties to whom the silver bullion in pieces in the seized car had been sold by them. (4) during investigation it was found that on 14-5-83 n.i.b.r. bombay under their transport voucher no. 4803 dated 14-5-83 sold two packets.....
Judgment:

Malik Sharief-Ud-Din, J.

(1) This petition under Article 226 of the Constitution of India has been filed by the petitioner for quashing the order of detention dated 23rd Sept., 1983 passed for and on behalf of the Government of Maharashtra State, respondent No. I 'under The Cofeposa Act 1974.'

(2) The detention order No, SPL. 3A/PSA 0183/113-11 dated 23-9-83 was passed by respondent no. 2 under Section 3 of Cofeposa Act of 1974 with a view to prevent the petitioner from smuggling and abetting the smuggling of silver. The representations made by the petitioner to the Central Government and State Government were rejected and the detention was confirmed after the Advisory Board held that the cause for detention was sufficient.

(3) We may here give a brief summary of the events that led to the investigation of the facts on the basis of which sponsoring authority and the detain- ing authority came to the conclusion that the petitioner was indulging in and abetting the smuggling of silver from India. On 14-5-83 on an information the officers of the Directorate of the Revenue Intelligence, Bombay, intercepted one Dawood Ishak Merchant in an Ambassador Car No. MMD-8477 in a lane opposite Darpan Theatre at Andheri at 4 p.m. and found four packages containing silver bullion in the dicky of the car. The officers also recovered 86 similar packages from a wooden box containing silver bullion kept in an open garage where the aforesaid car had stopped. Having hauled all the silver investigation regarding its ownership was conducted and it was found that some of the silver pieces seized in this case had the markings of M/s. National India Bullion Refinery, Bombay, for short hereinafter called N.I.B.R. one Shri Durga Dass Mehra partner of M/s N.I.B.R. in his statement, inter alias stated that they do not maintain piecewise particulars of silver bullion pieces which weigh less than I kg. and as such it was not possible to ascertain the parties to whom the silver bullion in pieces in the seized car had been sold by them.

(4) During investigation it was found that on 14-5-83 N.I.B.R. Bombay under their Transport Voucher No. 4803 dated 14-5-83 sold two packets containing 37 pieces of silver in each and respectively weighing 29.9474 kgs and 30.2311 kgs. to M/s Beam Corporation, 78A, Zaveri Bazar, Bombay-2 and M/s Beam Corporation on the same day sold both these packets to the petitioner. The first packet was sold under their transport Voucher No. 10644 dated 14-5-83 at 1145 hours and it contained 37 pieces weighing 30.2311 kgs. The other packet containing 37 pieces weighing 29.9474 kgs. was sold to the petitioner under transport Voucher No. 10646 at 1320 hours. On an enquiry and on checking and cross-checking the sales and stocks of the petitioner it was found that aforementioned quantity of silver was received by the petitioner and it was shown to have been disposed of by him to various parties in pieces. On an enquiry from the parties to whom it was shown to have been sold the investigation found that five parties were fictitious, one was dead and the rest denied having purchased any silver from the petitioner. Subsequently, on further interrogation of the petitioner the party who was reported to be dead was located and he accepted have transaction with the petitioner but denied having received any silver on that day. On a further interrogation of the petitioner on 27th July 1983 the petitioner offered to show the investigating agency the five parties about whom it was reported that they do not exist. It appears that this offer of the petitioner was totally ignored. The investigation thus concluded that the petitioner was disposing of silver bullion illegally by showing disposal to various fictitious parties in small qualities. The investigation also found that out of the four packets recovered from the car packet no. I and 3 were carrying the markings of Nibr, Bombay. The investigation thereafter, took as many as 40 samples from packet no. I for examination and determination of the purity. The report in respect of the examination by National Refinery Pvt. Ltd. was procured. We are making a reference to assay report for the simple reason that none for the tests out of the 40 samples has indicated the level of purity to the extent of 999 which packet no. I was expected to contain if it was the same which the petitioner had purchased from M/s Beam Corporation. It may be recalled that the two packets which were sold to the petitioner respectively weighed 30.2311 kgs and 28.9474 kgs. Both these packets came from Nibr, Bombay, The marking on the first packet admittedly was electro 999 while the marking on the second packet was 9875. It would thus appear that out of the total haul of 90 packets the ownership of packet no. 1 and 3 was attributed to the petitioner on the basis that the silver found therein was marked as Nibr and it was shown to have been sold by the petitioner in his records to fictitious persons. The petitioner is also said to have made an attempt to persuade many parties to whom he had shown the silver having been sold to confirm the purchase of silver if there was any enquiry from the department. The court is not taken into confidence as to what investigation was done in respect of the other 88 packets and what investigation were done in respect of the garage where from the silver was seized. The investigation formed its conclusion also on the basis of the fact that the sales shown by the petitioner were not genuine because the transactions are not against payments through cheque. On the basis of these facts and on verification of stocks the petitioner is stated to have disposed of silver weighing 93.8230 kgs. to some fictitious persons and such it was presumed under S. 11M of the Customs Act that the petitioner has illegally exported or abetted the export of the same out of India particularly in view of the fact that packets no. 1 & 3 weighing 29.9471 and 30.2311 kgs. which had been received by the petitioner on the same day were seized from the Car No. Mmd 8477 by the Directorate of Revenue Intelligence, Bombay. It was on the basis of this facts that the impugned detention order was passed against the petitioner.

(5) The ground for detention was thus formulated by the Government of Maharashtra on the basis of these facts. On perusal of the ground of detention communicated to the petitioner it is apparent that it mainly constitutes of details in respect of investigation and the only ground on the basis of which the petitioner apparently has been detained is that since the packets marked no. I and 3 containing 30.2311 kgs. and 29.9471 kgs. were having the marking of Nibr and were found to be almost similar in weigh which he had received on 14-5-83 from M/s Beam Corporation, thereforee, it is presumed under section 11M of the Customs Act that the petitioner has abetted to illegally smuggle it out of the country. The petitioner has thus been detained on the basis of a presumption of law under Section 11M of the Customs Act of 1962.

(6) We may at this stage make a reference to Section 11M Customs Act of

11M.'Steps to be taken by persons selling or transferring any specified goods except where he receives payment by cheque drawn by the purchaser. Every person who sells or otherwise transfers within any specified area any specified goods, shall obtain, on his copy of the sale or transfer voucher the signature and full postal address of the person to whom such sale or transfer is made and shall also take such other reasonable steps as may be specified by rules made in this behalf to satisfy himself as to the identity of the purchaser or the transferee, as the case may be, and if after an enquiry made by a proper officer, it is found that the purchaser or the transferee as the case may be, is not either readily traceable or is a fictitious persons,t shall be presumed, unless the contrary is proved, that such goods have been illegally exported and the person who had sold or otherwise transferred such goods had been concerned in such illegal export. Provided that nothing in this Section shall apply to petty sales of any specified goods if the aggregate market price obtained by such petty sales, made in the course of a day, does not exceed Rs. 2500.00 .'

(7) It would appear that the presumption raised under section 11M of the Customs Act is rebuttable and this presumption can be raised only after affording an opportunity to the petitioner to prove that there was no justification for raising such a presumption.

(8) In the first place Mr. Sibbel submitted that it was unheard of to base a detention order on a rebuttable presumption of law. He wants us to examine whether it is permissible to detain a person on the basis of such a presumption. Relevant part of Section 11M Customs Act says :

'IT shall be presumed, unless the contrary is proved, that such goods have been illegally exported and the person who had sold or otherwise transferred such goods had been concerned in such illegal export.'

(9) It would thus appear that the scheme of the Act seeks to prevent illegal exports. The object of the Customs Act 1962 as such is similar to what sought to be achieved by Cofeposa Act. We thereforee find no reason why the detention could not be ordered on the basis of such a presumption. We may however observe that since the presumption is rebuttable, for fair and adequate opportunity to rebut the same has necessarily to be afforded to a person against whom the presumption is sought to be raised. In the present case it would appear that the petitioner has been detained on the basis of presumption raised u/s 11M Customs Act of 1962, without affording any opportunity to the petitioner to rebut the same.

(10) Out of the parties to whom he has shown the silver having been sold five are said to be non-existent and one was said to be dead. On further investigation the petitioner bad successfully shown, living, the party which was said to be dead, though this party also has denied this particular transaction with the petitioner. The petitioner on 27-7-83 further offered to show that five so called non-existent parties but the offer went, unheeded. Only now during the hearing of this petition the sponsoring authority says that it was a mere pretence on the part of petitioner. At no stage earlier to this offer of the petitioner characterized as pretence. Mr. Sibal learned counsel for the petitioner has urged that all these parties have admitted of transacting business with the petitioner but they have denied this particular transaction for the obvious reason that they themselves had not maintained accounts as required by law. He has taken us through record to show that none of these parties have said that they are not having transactions with the petitioner, that in fact they are his customers over a period of years, that the petitioner could not be unfair to himself by recording names of parties who were his permanent customers and thereby jeopardize his own business interests, that if fictitious persons had to be introduced then the names would be different than his permanent customers. He has further contended that the offer of his client to show the non-existent five parties was deliberately ignored and even an attempt was made to show that one of the parties was dead. That his client had even reiterated this offer before the Advisory Board. Mr. Sibal contends that with this kind of investigation it was most unfair to accuse the petitioner of having sold silver to fictitious persons. Mr. Sibbel also contended that the sponsoring authority has not conducted the investigation as law and justice required of him. That may be so. There are more compelling reasons to support the view that this detention is based on totally non-existent material. A chain of circumstances during the course of investigation has been made the basis of presumption u/s 11M Customs Act of 1962. One of those circumstances we have mentioned above.

(11) The other circumstances are that the two packets namely packet no. 1 and 3 contained the same silver which had been purchased by the petitioner on the same day from M/s Beam Corporation. This is so said on the basis of its marking Nibr Admittedly the petitioner did purchase silver with this marking but he had purchased silver of electro 999 purity. Before establishing a nexus between the petitioner and the seized silver it had to be shown that packet no. 1 contained silver of electro 999 purity. The sponsoring authority opened packet no. 1 and as many as forty samples were got tested at National Refinery Pvt. Ltd. But as per Assay Report none of the samples is of 999 purity. Mr. Handa says that such marginal difference in purity may have arisen due to testing by a different laboratory. We do not agree. The argument is based on pure assumption. Besides, there is also marginal difference in the weight of the contents of the two packets. Thus it would be seen the contents of the two packets no. 1 and 3 do not tally with what was purchased by the petitioner from M/s Beam Corporation. It is thereforee difficult to establish the connection of these two packets with the petitioner simply on the basis of Nibr marking. That apart investigation is silent about the other 88 packets including two more seized from the same car. Silver worth near about a crore is found in a Garage and Court is told that the owner of the Garage could not be found. Under the circumstances we find force in the contention of Mr. Sibbal that it is more reasonable to presume that these two packets also belonged to the party who had dumped packages in the Garage.

(12) All these facts would clearly go to strengthen the suggestion of Mr. Sibbal that the detaining authority has passed the detention order in a most causal and mechanical manner. We have seen that the detaining authority has proceeded on the basis of non-existent material by basing the detention order on a rebuttable presumption u/s 11M Customs Act, 1962 without affording the petitioner any fair and reasonable opportunity to rebut the same.

(13) Mr. Handa has submitted that in the light of the well recognised rule that the Court cannot go into the sufficiency or insufficiency of the material and if the court finds that the order has been passed by the detaining authority no materials on record then the court cannot go further and examine whether the material was adequate or not which in fact is the function of an appellate authority or court. In this connection he has placed reliance on State of Gujarat v. Adam Kasam Bhava : 1981CriLJ1686 . We are very much conscious of the fact that in a matter like this it is not open to us to resort to a scrutiny as to whether the material before the detaining authority was sufficient to warrant the passing of detention order and we are also aware of the fact that the satisfaction essentially has to be that of the detaining authority and we cannot substitute it with our satisfaction. Indeed, it is the detaining authority which has to arrive at a subjective opinion and once it is found that it is passed on the material placed before the detaining authority and the detaining authority has applied its mind to the material the Court should not interfere.

(14) We may, however state that it is equally well recognized that the subjective satisfaction of the detaining authority is not wholly immune from judicial scrutiny. Court can examine whether the authority concerned has arrived at its satisfaction and if it finds that it has not done so, the condition precedent will be lacking and the exercise of the power would be bad. It is thus a duty is cast upon the court to examine the basic facts and materials which actually and in fact weighed with the detaining authority in reaching the requisite satisfaction. In the present case it would clearly appear that the detention order is passed on a rebuttable presumption of law which came to be formulated on the basis of investigation by the sponsoring authrority. In the present case we have seen that even though the petitioner made an offer to identify the five parties, no heed was paid to his offer at any stage. We have taken note of the fact that the silver seized from the Car was not of the purity that had been purchased by the petitioners & there was also difference in weight. We have also seen that another 86 packets of silver were simultaneously seized and we are not told about the results of investigation in respect of those 86 nor are we taken into confidence in respect of the other two packets seized from the same car. These facts are staring in the face and they are so glaring and prominent that no reasonable and prudent man could miss to apply his mind these facts. In the present case apparently the detaining authority has not all cared to look into these very prominent features and this goes to strengthen the suggestion of Mr. Sibbel that the detention order has been passed in at most casual and mechanical manner. The subjective satisfaction of the detaining authority necessarily has to be formed with certain amount of objectivity in as much as he must use his own discretion and wisdom and not to function as a rubber stamp of the sponsoring authority. He has to approach such matters like a reasonable and prudent man. In the present case we find she detention order in fact is based upon non-existent material. We thereforee accept this petition, quash the detention order against the petitioner and direct the release of the petitioner forthwith.


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