2024 (11) TMI 753 - HC - Customs

Arrest and detention order u/s 135 of the Customs Act, 1962 - recovery of the articles and cash from the two detained co-accused - HELD THAT - The applicant is dealing with sale of gold jewellery through his firm M/s. R.L. Jewels. The said firm is a proprietorship and is duly registered with the GST and MSME. The documents filed by the applicant including his bank statement, income tax returns, GST returns, stock register and other business related documents, prima-facie, indicate that the applicant is a businessman dealing with gold and gold jewellery. The statement given by the applicant also reflects that two persons who were apprehended namely Lalmohan Panja and Harekrishna Parai were the employees of the applicant and his brother. They too gave the statement that the jewellery and the cash belonged to the applicant and his brother. It is also reflected from the records that the flat situate in chowk Lucknow was rented by the brother of the applicant and his firm and was also utilized by the applicant for his business purposes including keeping the gold ornaments. Record further indicates that despite filing various affidavits by the applicant either in support of the bail application or in rejoinder affidavit to the counter affidavit filed by the DRI, yet there is no plausible explanation insofar as cash recovered from the co-accused is concerned, except that the said cash belonged to the applicant and his brother as it was generated from the sale of jewellery. Prima-facie record reflects that the quantum of business generated by the applicant through his firm can give rise to the turnover as suggested and the applicant may have the necessary resources to justify the availability of the quantity of gold and jewellery. It is also not the case of the DRI that the aforesaid gold/jewellery/cash was recovered from the airport or from a railway station near a border town from where the gold of foreign origin could be smuggled. Except for the incriminating statement made by the two co-accused namely Lalmohan Panja and Harekrishna Parai, there is nothing to indicate with clarity that the gold or gold jewellery which has been recovered and seized had any foreign origin. In such circumstances, the issue of reverse burden at this stage, where the Court is considering the bail, is not relevant in this given case rather it would be a matter to be considered by the trial Court during trial. Apart from Section 135 of the Customs Act, the applicant has not been charged with any other sections either under the Customs Act or any other Act for having committed an offence. It is also not disputed that the applicant does not have any other criminal history except for the case at hand. The applicant has been in jail since more than 4 months and apparently the DRI has not demonstrated any reason or purpose for which the custody of the applicant is required any more. It is also not disputed that the maximum sentence as prescribed under Section 135 of the Customs Act is upto 7 years and is triable by Magistrate and the complaint has already been filed. Also informed by the learned counsel for the applicant that the co-accused, namely, Ramkrishna Jaladhar Parai had already been enlarged on bail by this Court. Considering the nature of allegations and accusation against the applicant, the severity of the punishment if convicted including the fact that the applicant is not at flight risk nor it has been apprehended by the DRI that the applicant is in a position to tamper with evidence or influence any witness and that the charge under Section 135 of the Customs Act is yet to be established in trial also noticing the period of incarceration as well as the fact that the personal liberty of the applicant is a precious fundamental right which has to be balanced in the context with the punishment which may finally be awarded upon conclusion of trial, hence, at this stage, without expressing any opinion on the merits of the case, this Court is of the view that the applicant is entitled to be released on bail. Let the applicant Laxman Chandra J. Parai involved in Complaint Case/DRI Case No.6/2024 under Section 135 of the Customs Act, 1962, Police Station DRI, District Lucknow be released on bail on his furnishing a personal bond with two reliable sureties each in the like amount to the satisfaction of the court concerned.

Summary

Issues Involved:

1. Legality of the arrest and detention under Section 135 of the Customs Act, 1962.
2. The applicant's entitlement to bail under Section 439 Cr.P.C.
3. Burden of proof regarding the origin of the gold under Section 123 of the Customs Act.
4. The relevance of co-accused statements and their impact on the applicant's culpability.
5. Consideration of the applicant's business legitimacy and documentation.
6. Conditions for granting bail and ensuring compliance.

Detailed Analysis:

1. Legality of the Arrest and Detention:

The applicant was arraigned under Section 135 of the Customs Act, 1962, following the interception of two co-accused with gold and cash, allegedly intended for the applicant. The Directorate of Revenue Intelligence (DRI) conducted searches based on information from the co-accused, leading to further seizures. The applicant's previous anticipatory bail application was rejected, resulting in his judicial custody since June 29, 2024.

2. Entitlement to Bail:

The applicant filed a regular bail application under Section 439 Cr.P.C., arguing that he is a legitimate businessman with a registered firm, M/s. R.L. Jewels, and has been compliant with tax obligations. The applicant's counsel contended that the evidence does not support the charge of smuggling under Section 135 of the Customs Act, as there is no prima facie indication of the gold's foreign origin. The applicant has been in custody for over four months, and the maximum sentence under the section is seven years, suggesting that continued detention is unwarranted.

3. Burden of Proof:

Section 123 of the Customs Act places the burden of proof on the accused to demonstrate that the goods are not smuggled. The applicant argued that the DRI failed to provide evidence of foreign origin for the seized gold, relying solely on the statements of the co-accused. The court noted that the issue of reverse burden is more relevant for trial rather than bail consideration.

4. Co-Accused Statements:

The DRI opposed the bail, emphasizing the statements of the co-accused, who implicated the applicant in smuggling activities. The court acknowledged that while these statements are significant, they alone do not conclusively establish the applicant's guilt at the bail stage. The court also noted that the statements are admissible as they were made to a customs officer, not a police officer.

5. Business Legitimacy:

The applicant submitted various documents, including bank statements, GST returns, and income tax returns, to substantiate his claim of being a bona fide businessman. The court found these documents prima facie credible and noted that the DRI did not dispute their authenticity. The applicant's business dealings appeared properly documented, and there was no evidence of smuggling from airports or border areas.

6. Bail Conditions:

The court granted bail, considering the applicant's business legitimacy, lack of flight risk, and absence of prior criminal history. The bail conditions include prohibitions on influencing witnesses, tampering with evidence, and leaving the country without permission. The applicant must attend court proceedings and comply with specific conditions to avoid revocation of bail.

In conclusion, the court balanced the applicant's right to personal liberty with the severity of the charges, ultimately deciding to grant bail under strict conditions to ensure compliance and prevent any misuse of liberty.