2016 (3) TMI 426 - HC - Customs

Legal ruling on release of gold bars to Customs Authorities under Criminal Procedure Code

Satvashil Vasanth Mane @ Kiran Versus State of Kerala

The court held that the release of gold bars to Customs Authorities under Section 451 of the Criminal Procedure Code was legally unsustainable as there ... Release of property - seizure of gold and Indian currency - violation of provision of Customs Act. - Applicability of provisions of Sections 451 and 452 or 457 Cr.P.C - Held that:- when there is no inquiry or trial, neither Section 451 Cr.P.C. nor Section 452 Cr.P.C. are applicable. Had the property been not produced before the court below in an inquiry or trial, the parities could have invoked the procedure under Section 457 Cr.P.C. In all cases wherein the property is produced before the Magistrate, the court of the Magistrate is not powerless to rely on Section 457 Cr.P.C., for the disposal of such property. Only when the property is produced before such court 'in an inquiry or trial', the embargo to invoke the power under Section 457 Cr.P.C. comes. On looking into the scheme of the Code of Criminal Procedure, it seems that all such cases, which do not fall under the provisions of Sections 451 and 452 Cr.P.C., it squarely falls under Section 457 Cr.P.C. Here, the stage at which the property was produced and even the stage at which the court below has passed the impugned order was neither the stage of inquiry nor trial. Therefore, the court below could have considered the matter only with the aid of Section 457 Cr.P.C. Matters being so, the court below ought not have allowed the claims mooted under Section 451 Cr.P.C. The impugned order passed by the court below by releasing the property under Section 451 Cr.P.C., is therefore, not in accordance with law. Possession of property - Seizure of goods - Section 102(3) Cr.P.C. - Held that:- when it is possible to take a view that the property was produced by the police on seizure under Section 102(3) Cr.PC. before the court below, not in an inquiry or trial, the court below could have decided the question as to who was the person entitled to possession of that property at that stage. At that stage, no doubt, the Customs Authorities were the persons entitled to the possession of the said property. Even though, it was through an order which was not in accordance with law, it seems that the property is handed over by the court below to the Customs Authorities for custody, for invoking the provisions of the Customs Act. The ultimate decision taken by the court below can be reckoned as one under Section 457 Cr.P.C. Provisional release of goods, documents and things seized pending adjudication - Section 110A of the Customs Act, 1962 - Held that:- the petitioner has to establish his ownership over the property before the Adjudicating Authority. Whether the adjudication proceedings are initiated legally or not, is not a question at the time of invoking the power under Section 110A of the Customs Act but what is contemplated under Section 110A is that the said person making the claim should be the owner of the goods to be released, and he shall furnish such security and abide by such conditions as may be imposed by the Adjudicating Authority for the release of the goods to him. - Matter disposed of Issues Involved:1. Seizure of gold bars and Indian currency notes by police during a car inspection.2. Dismissal of claim by petitioner and release of gold bars to Customs Authorities by the court below.3. Applicability of Sections 451, 452, and 457 of the Criminal Procedure Code (Cr.P.C.) in the present case.4. Legality of court's order releasing the property under Section 451 Cr.P.C.5. Custody of property handed over to Customs Authorities for adjudication proceedings under the Customs Act, 1962.6. Rights of petitioner to approach Customs Authorities under Section 110-A of the Customs Act.Analysis:1. The police seized three gold bars and Indian currency notes during a car inspection, following which the matter was reported to the Magistrate's Court. Claims were filed by the petitioner and the Superintendent of Customs. The court below dismissed the petitioner's claim and released the gold bars to the Customs Authorities.2. The court below considered the matter under Section 451 Cr.P.C., which deals with proper custody of property during an inquiry or trial. However, it was argued that Section 451 Cr.P.C. does not apply as there was no inquiry or trial. The correct stage for consideration should have been under Section 457 Cr.P.C. since there was no ongoing inquiry or trial.3. The court below's order releasing the property under Section 451 Cr.P.C. was deemed legally unsustainable. It was highlighted that the property was produced before the court not during an inquiry or trial, making Section 457 Cr.P.C. applicable. The court should have decided the possession under Section 457 Cr.P.C. instead of Section 451 Cr.P.C.4. The property was ultimately handed over to the Customs Authorities for adjudication proceedings under the Customs Act, 1962. The Adjudicating Authority was directed to expedite the proceedings. The petitioner was granted the right to approach the Customs Authorities under Section 110-A of the Customs Act to establish ownership and seek release of the goods.5. The court emphasized that the observations made by the court below regarding the gold being smuggled articles were premature and not relevant for the adjudication proceedings. The legality of the initiation of adjudication proceedings was not a concern when invoking the power under Section 110-A of the Customs Act.6. In conclusion, the petitioner was permitted to move under Section 110-A of the Customs Act before the Adjudicating Authority. The court directed the Adjudicating Authority to promptly dispose of any application filed by the petitioner under Section 110-A of the Customs Act due to the delay in the matter.