Court Dismisses Applications, Permits Police Investigation. Challenge Chargesheet Without Legal Evidence. Denotify Daman to Tackle Liquor Supply.

The court dismissed all applications, allowing police to continue the investigation. Applicants may challenge the chargesheet if no legal evidence, beyond co-accused statements, is found. The court suggested denotifying Daman as a Union Territory to apply the Prohibition Act, addressing illegal liquor supply into Gujarat.

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Issues Involved:
1. Applicability of the Bombay Prohibition Act to residents of Daman.
2. Legality of prosecuting Daman residents under the Bombay Prohibition Act for offences committed in Gujarat.
3. Validity of the FIRs based on the statements of co-accused.
4. Interpretation of Section 40 of the Indian Penal Code (IPC) in relation to local laws.
5. Scope of police investigation under Sections 156 and 157 of the Criminal Procedure Code (Cr.P.C.).
6. Judicial discretion in quashing FIRs during the investigation stage.

Issue-wise Detailed Analysis:

1. Applicability of the Bombay Prohibition Act to Residents of Daman:
The applicants argued that the Bombay Prohibition Act, being a local law, does not apply to Daman, a Union Territory. They contended that they hold valid licenses for the sale of liquor in Daman and thus cannot be prosecuted under the Act for offences committed in Gujarat. The court, however, noted that the prohibition policy in Gujarat is stringent, and the easy availability of liquor in Daman has led to illegal transportation into Gujarat. The court emphasized that the applicants' involvement in the supply of liquor into Gujarat could prima facie attract the provisions of the Bombay Prohibition Act.

2. Legality of Prosecuting Daman Residents under the Bombay Prohibition Act for Offences Committed in Gujarat:
The court rejected the argument that the Bombay Prohibition Act has no extraterritorial application. It held that the clandestine manner in which liquor consignments were supplied and brought into Gujarat indicates the applicants' complicity in the offence. The court emphasized that proper investigation is required to ascertain the extent of their involvement.

3. Validity of the FIRs Based on the Statements of Co-Accused:
The applicants argued that most FIRs were based on statements of co-accused, which do not constitute legal evidence. The court, however, held that at the initial stage of investigation, such statements could provide clues for deeper investigation. The court refused to quash the FIRs on this ground, emphasizing the need for a thorough investigation.

4. Interpretation of Section 40 of the IPC in Relation to Local Laws:
The applicants contended that Section 120B of the IPC (criminal conspiracy) does not figure in Section 40 of the IPC, which defines "offence" under local laws. The court clarified that Section 40 includes acts punishable under special or local laws when the punishment is imprisonment for six months or more. The court held that abetment of offences under the Bombay Prohibition Act could be prosecuted under Sections 109 to 117 of the IPC.

5. Scope of Police Investigation under Sections 156 and 157 of the Cr.P.C.:
The court referred to Sections 156 and 157 of the Cr.P.C., which confer wide powers on the police to investigate any cognizable offence. The court emphasized that the definition of "offence" under Section 2(n) of the Cr.P.C. is broad enough to include offences under special and local laws. The court held that the police have the authority to investigate the offences under the Bombay Prohibition Act involving the applicants.

6. Judicial Discretion in Quashing FIRs During the Investigation Stage:
The court reiterated the principles laid down by the Supreme Court in State of Haryana vs. Bhajanlal, emphasizing that the power to quash FIRs should be exercised sparingly and only in rare cases. The court held that the present case does not fall within the categories warranting quashing of FIRs. The court refused to interfere with the ongoing investigation, allowing the police to complete it in accordance with law.

Conclusion:
The court dismissed all the applications, allowing the police to continue their investigation. It emphasized that the applicants could challenge the chargesheet if no legal evidence, apart from the statements of co-accused, is found against them at the end of the investigation. The court also suggested that the Central Government consider denotifying Daman as a Union Territory to make the Prohibition Act applicable, thereby addressing the issue of illegal liquor supply into Gujarat.

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