2011 (3) TMI 742 - HC - Central Excise

Petitioner's Bail Cancelled Over Suspected Illegal Activities

The court upheld the cancellation of bail for the petitioner due to suspicions of involvement in illegal activities, including producing fraudulent ... Cancellation of bail - the house in which Pan Masala/Gutkha factory was running, is owned by the petitioner. - nobody has been able to produce the licence of factory and they are shifting the responsibility from one to other but it cannot be believed that the petitioner was not aware regarding running of said factory, may be by his tenant - Even if it is assumed that the factory was run by the tenant (co-accused) who is in jail, but before his arrest, he has been found in constant touch of the petitioner on mobile telephone - . Therefore, either the petitioner has mis-used the bail or not but offence being public offence, the learned Sessions Judge has not committed any error in cancelling the petitioner’s bail. - The petition is, therefore, dismissed Issues Involved:1. Legality of the bail cancellation order dated 3rd March 2011.2. Considerations for grant and cancellation of bail.3. Relevance and admissibility of evidence, particularly the confession of a co-accused.4. Allegations of fraud in producing documents for bail.Issue-wise Detailed Analysis:1. Legality of the Bail Cancellation Order:The petitioner challenged the order dated 3rd March 2011, passed by the learned Sessions Judge, Lucknow, which cancelled the petitioner's bail. The bail was initially granted on 13th January 2011, as there was no evidence connecting the petitioner to the crime. The cancellation was sought by the respondent-Union of India under Section 439(2) of the Code of Criminal Procedure, on the grounds that the petitioner misled the investigation by not disclosing his communication with co-accused Vishnu Kant Sharma. The Sessions Judge, upon reviewing the facts and the statement of the co-accused, concluded that the documents purported to be an agreement between the petitioner and the co-accused appeared to be forged, leading to the bail cancellation.2. Considerations for Grant and Cancellation of Bail:The petitioner's counsel argued that the grounds for bail cancellation were the same as those for granting bail, without any new material. The Supreme Court in Manjit Prakash v. Shobha Devi emphasized that the considerations for granting and cancelling bail are different. Bail can be cancelled if the accused misuses liberty, interferes with the investigation, tampers with evidence, threatens witnesses, or attempts to evade justice. The court highlighted that cancellation of bail is a harsh order and should not be lightly resorted to.3. Relevance and Admissibility of Evidence:The petitioner's counsel cited Mohtesham Mohd. Ismail v. Spl. Director, Enforcement Directorate, where the Supreme Court held that the confession of a co-accused is not substantive evidence and requires corroboration from independent sources. The respondent's counsel countered by citing Naresh J. Sukhawani v. Union of India, where the Supreme Court held that statements made before Customs Officials are material evidence and can be used substantively against another person. The Sessions Judge considered the statement of the co-accused, which implicated the petitioner, as relevant under the Central Excise Act, establishing prima facie connivance in running the factory.4. Allegations of Fraud in Producing Documents for Bail:The respondent's counsel argued that the petitioner committed fraud by producing a non-existent document to obtain bail. The Supreme Court in A.V. Papayya Sastry v. Govt. of A.P. stated that fraud vitiates all judicial acts. The petitioner failed to produce the original agreement document, providing contradictory explanations. The court found that the petitioner's actions indicated awareness and possible connivance in the illegal activities of the factory, justifying the bail cancellation.Conclusion:Upon reviewing the record, the court found that the petitioner, as the owner of the house where the illegal factory operated, failed to produce a valid license or the original agreement document. The petitioner's contradictory statements and constant contact with the co-accused on mobile reinforced the suspicion of his involvement. The learned Sessions Judge did not err in cancelling the bail, considering the public nature of the offense and the petitioner's potential misuse of bail. The petition was dismissed, with the petitioner given two weeks to surrender, during which no coercive action would be taken against him.