Gold smuggling and terrorist act under UAPA: Court reads economic security narrowly and rejects bail embargo.

Gold smuggling through diplomatic baggage was assessed under the Unlawful Activities (Prevention) Act, 1967 to determine whether it amounted to a terrorist act and attracted the bail embargo in Section 43D(5). Applying strict construction of penal statutes, together with ejusdem generis and noscitur a sociis, the Court read the "economic security" limb as confined to counterfeiting of high-quality currency notes, coins, or related material. Ordinary gold smuggling, even on a repeated or large-scale basis, was held not to satisfy that definition absent prima facie material showing terrorist activity or use of proceeds for terrorist purposes. The embargo did not apply and bail was maintainable.

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Issues: Whether the allegations of gold smuggling through diplomatic baggage disclosed a terrorist act under the Unlawful Activities (Prevention) Act, 1967 so as to attract the embargo under Section 43D(5) and justify refusal of bail.

Analysis: The accusations were examined in the light of the earlier coordinate Bench decision and the statutory scheme of Section 15(1)(a)(iiia). The Court held that the legislative focus of the "economic security" limb was confined to counterfeiting of high quality currency notes, coins, or material connected with such counterfeiting. Applying strict construction of penal statutes, and the principles of ejusdem generis and noscitur a sociis, the Court held that ordinary gold smuggling, even if carried on repeatedly and on a large scale, did not by itself answer the definition of a terrorist act. The materials in the charge-sheet and witness schedule did not prima facie disclose any terrorist activity, nor any use of proceeds for terrorist purposes, and therefore the special restriction on bail under Section 43D(5) was not attracted.

Conclusion: The allegation of gold smuggling did not constitute a terrorist act under the Act, and the refusal of bail could not be sustained. Bail was held to be maintainable in favour of the accused.

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