2013 (7) TMI 714 - HC - Central Excise

Bail for an offence under section 9AA of the Excise Act There were four accused, stating that the accused are charged for the offence of manufacture of biris and the removal of the same, illicitly, to the tune of Rs.15,50,88,000/- biris (inclusive of 86,400/- biris under seizure) and evasion of payment of central excise duty to the tune of Rs.5,76,726.15/- in contravention of Rule 9(1), 52-A, 53, 94 and 226 of the Central Excise Rules 1944 - The accused has filed discharge petition under Section 245 of Cr.P.C., to discharge them from the proceedings - Dismissed the said discharge petition - Against the dismissal of the said discharge petition, the third and fourth accused have filed the above revision. Held that - As per the partnership deed registered on 01.06.1992, all the four accused have been listed as partners and have agreed to keep themselves actively engaged in conducting the business of the first accused company, as working partners. As such, admittedly, all the partners are actively taking into participation to manage the day to day affairs of the first accused company. The second accused is the Managing Partner, who has given statement that all the partners are engaged in business activity as working partners. Therefore, the prosecution case has been levelled against all the accused - The prosecution case is at a partly heard stage. Under the circumstances, this Court is not inclined to interfere with the impugned order passed by the learned Magistrate. However, the accused are entitled for speedy trial as per Article 21 of the Constitution. Therefore, this Court directs the learned Magistrate to dispose the case on merits on the topmost priority basis Decided against the Assessee.

Issues Involved: Discharge petition under Section 245 of Cr.P.C., maintainability of charges under Section 246 of Cr.P.C., interpretation of partnership deed, necessity of accused parties in the proceedings, interference with trial court's order, speedy trial rights.

Analysis:

1. Discharge Petition under Section 245 of Cr.P.C.: The accused filed a discharge petition under Section 245 of Cr.P.C. to be relieved from the proceedings, which was dismissed by the Magistrate. The revision petitioners argued that there was no evidence warranting charges under Section 246 of Cr.P.C. They claimed that they were falsely implicated, as witnesses did not implicate them in the case. The revision petitioners contended that the original complaint was not maintainable against them, and they were not active participants in the business of the accused company. The court considered the arguments but found no prima facie case against the revision petitioners.

2. Maintainability of Charges under Section 246 of Cr.P.C.: The revision petitioners argued that the prosecution witnesses were not aware of who was in charge of the day-to-day affairs of the company, and the accused parties were entitled to be discharged from the proceedings based on this lack of clarity. The defense emphasized that the accused 3 and 4 should not be prosecuted as per the proviso to Section 9AA of the Central Excise and Salt Acts. However, the prosecution contended that all partners were actively engaged in managing the business, and the partnership deed listed all accused as working partners. The court noted the active involvement of all partners in the company's affairs based on the partnership deed.

3. Interpretation of Partnership Deed: The prosecution argued that all accused parties were actively participating in the business as per the partnership deed. The defense claimed that the accused 3 and 4 were not necessary parties in the proceedings and should be discharged. The court considered the partnership deed and concluded that all accused were partners actively involved in the company's operations, leading to the rejection of the discharge petition.

4. Necessity of Accused Parties in the Proceedings: The defense raised concerns about the accused parties being necessary in the proceedings and highlighted previous petitions for the same remedy. The prosecution argued against the discharge of accused 3 and 4, stating that they were essential parties in the ongoing prosecution. The court acknowledged the arguments but upheld the trial court's decision, emphasizing the necessity of all accused parties in the proceedings.

5. Interference with Trial Court's Order: Upon reviewing the facts and arguments from both sides, the court found no shortcomings in the trial court's order. The court noted that the prosecution case was at a partly heard stage with four witnesses examined. While not interfering with the trial court's decision, the court directed the magistrate to ensure a speedy trial for the accused parties as per their rights under Article 21 of the Constitution.

6. Speedy Trial Rights: The court emphasized the accused parties' entitlement to a speedy trial under Article 21 of the Constitution. While dismissing the revision, the court directed the magistrate to prioritize and expedite the case without being influenced by the court's discussion, ensuring a fair and timely trial for the accused parties.

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