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2023 (1) TMI 1000 - HC - CustomsSeeking quashment of proceedings against Managing Director of the Company, one of the vendors of RFID e-seals - Tampered e-seals - it is alleged that the e-seals supplied by the Company were passing customs clearances even when it was not in a locked condition - liability of Managing Director of the Company in the alleged offence - HELD THAT - The Company was in-charge of manufacture of RFID e-seals and tampering alert was in the control of the Company in which the 2nd petitioner is the Director. It becomes germane to notice the Circulars issued by Government of India in the Department of Revenue of the Central Board of Excise and Customs with regard to the export procedure and sealing of containerized cargo from time to time. The communication was clear that the DRI has critically examined RFID e-seals supplied by M/s Leghorn Group, Italy and they have been found to be compromising in security requirements and was a serious issue and therefore, stopped all seals made by M/s Leghorn Group. Later, the crime come to be registered and a search is made in the office of the Company and at the time the seals are seized and were sent to their examination where it was found that since March 2018 the testing commenced and approximately 832 seals of the Company were faulty. The tamper status of the seals was covered up as the tamper alarm had been switched off. The petitioners are alleged of compromising security of the container which contains what ought to be known to the Department, if not known and would passes muster, even if it is a narcotic drug, the menace of the threat looms large in that sector or that facet. Therefore, finding no merit in the contention that nothing has happened for the last 3 years and a co-ordinate Bench obliterating the proceedings against accused No.3 are of no assistance to the learned counsel appearing for the petitioners. The issue in the lis is shrouded with admissions and certain seriously disputed questions of fact, which will have to be thrashed out only in a full blown proceeding. It is rather surprising as to why the DRI has not proceeded further and filed its final report is a serious matter of the kind. It is for the DRI to conclude the investigation, if not already concluded and take the proceeding to its logical end. Reference being made to the judgment of the Apex Court in the case of KAPTAN SINGH VERSUS THE STATE OF UTTAR PRADESH AND OTHERS 2021 (9) TMI 61 - SUPREME COURT where it was held that the High Court has grossly erred in quashing the criminal proceedings by entering into the merits of the allegations as if the High Court was exercising the appellate jurisdiction and/or conducting the trial. The High Court has exceeded its jurisdiction in quashing the criminal proceedings in exercise of powers under Section 482 Cr.P.C. There are no merit to interfere or interdict the investigation, against the petitioners, as any interference would amount to putting a premium on the acts of the petitioners, for having compromised the security of the nation, which act sans countenance. Petition dismissed.
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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