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2023 (1) TMI 1000 - HC - Customs


Issues Involved:
1. Registration of crime under Sections 66C and 72A of the Information Technology Act, 2000, and Sections 406, 420, and 34 of the IPC.
2. Allegations of tampering with RFID e-seals and compromising national security.
3. Previous quashing of FIR against the Managing Director by a co-ordinate Bench.
4. Petitioners' request for quashing of proceedings based on the previous judgment.
5. Central Government Standing Counsel's argument against quashing due to serious allegations.
6. Examination of the petitioners' involvement and admissions regarding tampering alerts.

Detailed Analysis:

1. Registration of Crime:
The petitioners challenged the registration of Crime No.172 of 2019 for offences under Sections 66C and 72A of the Information Technology Act, 2000, and Sections 406, 420, and 34 of the IPC. The case was pending before the 1st Additional Chief Metropolitan Magistrate, Bangalore City.

2. Allegations of Tampering with RFID e-Seals:
The Company, engaged in supplying RFID e-seals for exporters, was accused of supplying seals that were tampered with, leading to compromised security. The seals were manufactured by M/s Leghorn Group SRL, Italy. It was alleged that the seals passed customs clearances even when not locked and that tampering alerts were switched off, allowing tampered containers to be exported.

3. Previous Quashing of FIR:
A co-ordinate Bench had previously quashed the FIR against the Managing Director of the Company, stating he had no role in the corporate affairs and the documents produced were not controverted. The petitioners sought similar relief based on this judgment.

4. Petitioners' Request for Quashing Proceedings:
The petitioners argued that the Company, not the Director, was responsible for the alleged offences. They contended that since the FIR against the Managing Director was quashed, the proceedings against the Director should also be quashed.

5. Central Government Standing Counsel's Argument:
The Central Government Standing Counsel opposed the quashing, stating that the co-ordinate Bench's decision was made without hearing the Directorate of Revenue Intelligence (DRI). The allegations involved serious concerns about national security, and the investigation revealed that the seals were not tamper-proof and had a high tampering rate. The Company had submitted false data to the Government, and the matter required a thorough investigation.

6. Examination of Petitioners' Involvement:
The Court noted admissions by the 2nd petitioner that the Company had switched off tamper alerts due to sub-standard seals. This decision was made by the entire Board of Directors, including the 2nd petitioner. The Court emphasized that such actions compromised national security and could not be excused in the interest of business.

Conclusion:
The Court found no merit in the petitioners' contention that the Director had no role in the issue. The admissions by the 2nd petitioner indicated that the entire Board, including the Director, was aware of and responsible for switching off tamper alerts. The Court held that compromising national security for business interests was unacceptable. The Criminal Petition was dismissed, and the investigation was allowed to proceed to its logical end. The Court referenced the Supreme Court's judgment in Kaptan Singh v. State of Uttar Pradesh, emphasizing that serious allegations should be examined during the trial and not quashed prematurely.

 

 

 

 

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