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2022 (2) TMI 566 - HC - CustomsDelay in the investigation conducted by Respondent No. 1 - country wide export ban - issuance of LC s involving a huge sum of money - allegation against the petitioner is that it indulged in backdating, forgery and manipulation of the LC s to circumvent the export ban on pulses which was imposed vide notification dated 27.06.2006 read with notification dated 04.07.2006 for irrevocable LC s issued on or after 22.06.2006 - HELD THAT - It is well settled that a realistic and practical approach should be made having regard to all attending circumstances including the nature of offence. Each case has to be considered on its own facts and circumstances with respect to being mechanically persuaded by the Courts merely because delay was occasioned during investigation. In the present matter, it is imperative to look into the reason behind the prolonged investigation. The LC s in question were issued by a foreign bank, and therefore, a Letter Rogatory hereinafter LR had to be issued by the Chief Metropolitan Magistrate under Section 166 CrPC to New Zealand through the Interpol to investigate and unearth the facts and circumstances underlying the issuance of the LC s. These were in relation to the procedure for opening of LC s in WSBC Bank, identifying the persons involved, determining as to how the amended LC was issued, mode of dispatching the LC s, collection of documents and examination of witnesses - Since the proposed agreement was in the nature of a bilateral agreement between the two countries, the concurrence of the MEA and the Department of Legal Affairs (DoLA) was required. However, a lot of time was taken in receiving the requisite clearance from the Ministries despite regular follow ups made by the Respondent No. 1 at various levels. The final draft was approved on 06.07.2017. It is clarified that the stance of the petitioner that it is only a beneficiary who does not have the duty to check the authenticity of the LC s cannot preclude the Respondent No. 1 from interrogating the petitioner regarding the export made by the company and asking for the relevant documents in furtherance of the investigation. The further allegation that the bank advising the exporter and the bank advising the importer which have opened the LC and the importer have no quarrel with the LC and, therefore, no case is made out at all cannot be accepted. The allegation is that the LCs have been fabricated and back-dated in order to circumvent the Government's notification banning exports. Obviously, no one else will have a grievance over the transaction. It is the duty of the CBI who has received information regarding the manipulation of the LC's to investigate into the crime which has a serious effect on the economy of the country - It is clear that despite periodic reminders, there have been administrative and systemic delays over which the Respondent No. 1 had no control. It is also pertinent to note that there has been no substantial prejudice caused to the petitioner herein. The petitioner has also not been able to show any tangible loss in its trading activities. Considering the fact that the present matter deals with a country wide export ban and the issuance of LC s involving a huge sum of money and the fact that the investigation is in its crucial stage, the balance tilts towards having a fair investigation even if it is facing considerable time. Therefore, this court is not inclined to quash the complaint at this juncture - CBI is directed to conclude the investigation as expeditiously as possible. Petition disposed off.
Issues Involved:
1. Validity of the Letters of Credit (LCs) and their alleged backdating. 2. Applicability of the export ban on pulses. 3. Delay in investigation by the CBI. 4. Allegations of fraud, forgery, and manipulation. 5. Impact of the investigation on the petitioner’s business activities. Issue-wise Detailed Analysis: 1. Validity of the Letters of Credit (LCs) and Their Alleged Backdating: The petitioner, a public limited company engaged in the export of food commodities, received three irrevocable LCs from WSBC Bank on 21.06.2006. The LCs were allegedly backdated to circumvent the export ban on pulses imposed by the DGFT notification dated 27.06.2006. The petitioner argued that the LCs were valid and issued before the notification, allowing them to export pulses. However, the CBI alleged that the LCs were manipulated and backdated, lacking proper authorization and signatures, to bypass the export ban. 2. Applicability of the Export Ban on Pulses: The DGFT notification dated 27.06.2006, extended by a notification on 04.07.2006, prohibited the export of pulses with immediate effect, except for irrevocable LCs established before 22.06.2006. The petitioner contended that their LCs were established before the notification, thus exempting them from the ban. The CBI, however, argued that the LCs were backdated to appear as if they were established before the notification, thereby violating the export ban. 3. Delay in Investigation by the CBI: The petitioner highlighted the significant delay in the CBI’s investigation, with the initial complaint registered in 2007 and the investigation still ongoing. The petitioner argued that the delay was a gross abuse of the process of law, causing harassment and defamation. The CBI countered that the delay was due to unavoidable circumstances, including international cooperation and administrative processes, and not due to any deliberate action on their part. 4. Allegations of Fraud, Forgery, and Manipulation: The CBI alleged that the petitioner engaged in fraud, forgery, and manipulation by backdating the LCs to circumvent the export ban. The petitioner refuted these allegations, asserting that the investigation did not result in any chargesheet and failed to demonstrate any evidence of wrongdoing. The petitioner also argued that the CBI registered the complaint without conducting a preliminary enquiry, making the investigation untenable. 5. Impact of the Investigation on the Petitioner’s Business Activities: The petitioner claimed that the investigation caused significant harm to their business activities, including the suspension of their Importer Exporter Code and the withholding of payments by Karnataka Bank. The petitioner emphasized that the investigation, conducted over 14 years, had not shown any concrete evidence of contravention of the export ban or manipulation of the LCs. Conclusion: The court considered the arguments from both parties, emphasizing the need for a realistic and practical approach considering the nature of the offence and the circumstances of the case. The court acknowledged the delay in the investigation but attributed it to unavoidable international cooperation and administrative processes. The court also noted that the petitioner had not shown any substantial prejudice or tangible loss in their trading activities due to the investigation. Given the serious nature of the offences and the societal impact, the court decided not to quash the FIR at this juncture and directed the CBI to conclude the investigation expeditiously. Disposition: The petition was disposed of with directions to the CBI to expedite the investigation.
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