2009 (10) TMI 953 - HC - Companies Law

Summary

Issues Involved:
1. Constitutionality and legality of the petitioner's arrest under Section 13 of the Central Excise Act, 1944.
2. Validity of the proceedings in C.O. No. 1 of 2009 initiated without a formal complaint or FIR.
3. Legitimacy of the order dated 18.5.2009 directing the petitioner to authenticate printouts from a seized laptop and the implications of non-compliance on the petitioner's bail bond.

Detailed Analysis:

1. Constitutionality and legality of the petitioner's arrest under Section 13 of the Central Excise Act, 1944:
The petitioner challenged his arrest by invoking Article 226 of the Constitution of India, arguing that the arrest was unconstitutional and unlawful as the offences under Section 9 of the Central Excise Act are non-cognizable in terms of Section 9A. The petitioner contended that without a warrant of arrest, the arrest was not competent.

The court analyzed the provisions of the Central Excise Act, particularly Sections 9, 9A, 13, 18, and 21. It was concluded that Section 13 empowers Central Excise Officers to arrest any person they believe is liable to punishment under the Act, and this power is not curtailed by Section 9A. Section 18 relates to the procedure for arrests and searches, ensuring compliance with the Code of Criminal Procedure but does not limit the power of arrest conferred under Section 13. The court emphasized that the legislative intent was to empower Central Excise Officers to arrest without a warrant to prevent evasion of duty and ensure compliance with the Act. Therefore, the arrest of the petitioner by the Central Excise Officer was held to be constitutional and lawful.

2. Validity of the proceedings in C.O. No. 1 of 2009 initiated without a formal complaint or FIR:
The petitioner sought to quash the proceedings in C.O. No. 1 of 2009, arguing that they were not initiated on a formal complaint or FIR as required under Section 2(d) of the Code of Criminal Procedure. The court examined the nature of the application that led to the initiation of the case and found it to be an offence report rather than a formal complaint, indicating that the investigation was still ongoing.

The court referred to the case of Directorate of Enforcement vs. Deepak Mahajan, where it was held that the detention authorized by a Magistrate under similar provisions in other Acts was valid. The court concluded that the proceedings were legitimate as they were based on an offence report, and the investigation was not yet complete. Thus, the continuation of the proceedings did not constitute an abuse of the process of law.

3. Legitimacy of the order dated 18.5.2009 directing the petitioner to authenticate printouts from a seized laptop and the implications of non-compliance on the petitioner's bail bond:
The petitioner challenged the order dated 18.5.2009, claiming it violated Article 20(3) of the Constitution of India, which protects against self-incrimination. The order directed the petitioner to authenticate printouts from a laptop seized during the investigation, with a threat of bail bond cancellation for non-compliance.

The court analyzed whether the authentication of documents would amount to self-incrimination. It was noted that the printouts were taken under the court's order in the presence of both parties and required authentication to avoid further complications. The court referred to the case of State of Bombay vs. Kathi Kalu Oghad, which clarified that self-incriminatory testimony must, by itself, tend to incriminate the accused. The court concluded that simple authentication of documents does not constitute self-incriminatory testimony and thus does not violate Article 20(3).

However, the court found that the part of the order threatening to cancel the bail bond for non-compliance was not sustainable, as the consequences for non-compliance were already provided under Section 14 of the Central Excise Act. Therefore, that part of the order was quashed.

Conclusion:
The court held that the Central Excise Officer acted within jurisdiction in arresting the petitioner and that the proceedings in C.O. No. 1 of 2009 were valid. The order dated 18.5.2009 was upheld, except for the part threatening bail bond cancellation, which was quashed. The application was allowed in part to the extent indicated above.