2021 (11) TMI 288 - HC - Customs

Court grants bail in gold smuggling case, ruling not terrorism. Precedent for bail conditions set.

The High Court allowed the appeals, directing the release of the accused on bail and setting specific conditions. The court held that smuggling of gold ... Smuggling - Gold - terrorist offence - incarceration pending investigation and trial - infringement of right to life guaranteed under Article 21 of the Constitution - HELD THAT:- A nation's currency is legal tender brought out by the Central Bank of that nation, in our case, the Reserve Bank of India. The observation made by the Division Bench with respect to smuggling of other precious metals with a profit motive to find smuggling of gold having no distinctive status from those other precious metals is significant. Gold as was observed by the FATF is global currency and is a medium of exchange more so in India where there is a tendency to hoard that particular metal. In fact, even smuggling of gold and other precious metals which aims at destabilizing the economy would be covered under threats to economic security, as generally understood. The facts of the case as seen from Annexure-B indicates the activities of the accused having been first detected, when contraband was seized from the import cargo addressed to the Charge D' Affaires at the Consulate General of the UAE, on 05.07.2020 at the Air Cargo Complex of Trivandrum International Air Port by the Customs [Preventive] Commissionerate, Cochin. A1 was first arrested, which led to the arrest of A2 to A4. The facts unearthed during investigation reveals a conspiracy entered into by A1 to A5 for facilitating smuggling through the diplomatic cargo addressed to the Consulate General of UAE. A1, with the knowledge and assistance of A2, to further the plans hatched, forged authorisation letters on behalf of the Consulate General and with the active connivance of the other accused carried out smuggling by clearing the contraband sent through diplomatic baggage and handed them over to the various accused - the charges alleged do not commend us to find the accused having any connection with any terrorist act under S.15, least of all, a threat to the economic security of the nation, which we have found; on an interpretation of S.15(1)(a)(iiia); is restricted to counterfeiting high quality notes and coins and any other material dealt with, towards that end. The appellants/accused shall be released on bail on their executing a bond for a sum of ₹ 25,00,000/- each with two solvent sureties each for the like-sum to the satisfaction of the Special Court - Application allowed. Issues Involved:1. Applicability of the Unlawful Activities (Prevention) Act (UA(P)A) to the smuggling of gold.2. Prima facie evidence of a terrorist act under Section 15 of UA(P)A.3. Consideration of bail applications under Section 43D(5) of UA(P)A.4. Distinction between front-liners and back-liners in the smuggling operation.5. Impact of continued incarceration on the right to life under Article 21 of the Constitution.Issue-wise Detailed Analysis:1. Applicability of the Unlawful Activities (Prevention) Act (UA(P)A) to the smuggling of gold:The appellants argued that the smuggling of gold does not fall under the definition of a 'terrorist act' as per Section 15 of UA(P)A. They relied on the precedent set by the Division Bench in *Muhammed Shafi P. v. NIA Kochi*, which held that smuggling of gold is covered by the Customs Act and not by UA(P)A unless there is evidence showing intent to threaten India's economic security or monetary stability. The court upheld this view, stating that the definition of a terrorist act under UA(P)A is restricted to high-quality counterfeit currency and coins, and does not extend to gold smuggling.2. Prima facie evidence of a terrorist act under Section 15 of UA(P)A:The court examined whether there were materials suggesting that the accusation against the accused is prima facie true, as required under Section 43D(5) of UA(P)A. The Special Court had found materials revealing conspiracy and multiple instances of gold smuggling. However, the High Court found that the facts and charges did not prima facie indicate any terrorist act as defined under Section 15 of UA(P)A. The court emphasized that the threat to economic security, as per Section 15(1)(a)(iiia), is confined to counterfeiting high-quality currency notes and coins, not gold smuggling.3. Consideration of bail applications under Section 43D(5) of UA(P)A:The court noted that if UA(P)A is not applicable, the consideration of bail should be under Section 439 of Cr.P.C., which has a lighter rigour compared to UA(P)A. The court found no prima facie truth in the accusations under UA(P)A, thus the stricter terms of Section 43D(5) were not applicable. The court allowed the bail applications of all the accused, directing their release on specific conditions.4. Distinction between front-liners and back-liners in the smuggling operation:The Special Court had distinguished between front-liners and back-liners, granting bail to the latter while rejecting the bail applications of the former. The High Court found this distinction irrelevant, as the activity being smuggling of gold does not constitute a terrorist act under UA(P)A. The court noted that the appellants were kept behind bars only because of the prosecution under UA(P)A, which was not applicable in this case.5. Impact of continued incarceration on the right to life under Article 21 of the Constitution:The appellants argued that their continued incarceration pending investigation and trial infringed their right to life guaranteed under Article 21 of the Constitution. The court acknowledged this concern, especially since the appellants had been granted bail in cases filed under the Customs Act. The court emphasized that unnecessary prolonged detention without just cause violates the right to life and directed the release of the appellants on bail.Conclusion:The High Court allowed the appeals and directed the release of the accused on bail, setting aside the Special Court's order. The court imposed specific conditions for bail, including the execution of a bond, surrender of passports, restrictions on leaving the state, and regular reporting to the local police station. The court reiterated that the smuggling of gold does not fall under the definition of a terrorist act as per UA(P)A, and thus, the stricter bail considerations under UA(P)A were not applicable.