2018 (2) TMI 753 - HC - Customs

Smuggling - illegal export of red sanders in artifact form - Held that - only where a company, which as per the explanation includes also a firm, was found guilty of an offence would those in charge of and responsible to it in the conduct of its affairs, be liable - As in the instant case, the firm M/s. Rare Crafts, of which petitioners are partners has not been arrayed as an accused, no liability could be fastened to petitioners. - revision allowed.

Summary

Issues:
Prosecution for offences under Customs Act and related acts, Liability of individuals in a company/firm, Validity of prosecution sanction.

Analysis:
The case involved the prosecution of petitioners for offenses under sections 132 and 135(1)(a), (b), and (c) of the Customs Act, 1962, along with other related acts. The petitioners sought discharge through M.P. No. 814 of 2010, which was dismissed, leading to the revision. The primary contention was that while the individual partners were accused, the firm itself was not included. Section 140 of the Customs Act was crucial, stating that in the case of a company, including a firm, those in charge and responsible for its conduct would be deemed guilty. Since the firm was not accused, the liability could not be imposed on the partners. Additionally, the validity of the prosecution sanction was challenged by the senior counsel for the petitioners.

The court analyzed Section 140 of the Customs Act, emphasizing that liability could only be imposed on individuals in charge of a company or firm if the entity itself was found guilty. As the firm in question was not accused, the partners could not be held liable. The senior counsel also raised the issue of the invalidity of the prosecution sanction, further weakening the case against the petitioners. The court agreed with the senior counsel's argument, highlighting the need for a fresh prosecution if desired by the respondent, as the firm's inclusion was crucial for liability to be established.

In conclusion, the Criminal Revision Case was allowed, setting aside the order of the Additional Chief Metropolitan Magistrate. The petitioners were discharged from the case due to the absence of the firm as an accused party. The judgment underscored the importance of properly including the company or firm in cases involving liability of individuals in charge of its affairs, as per the provisions of the Customs Act.