Court grants absolute custody of seized gold to DRI under Customs Act; criticizes police delays

The court found the Judicial Magistrate's order regarding the interim custody of seized gold to be improper and set it aside. The Directorate of Revenue Intelligence (DRI) was granted absolute custody of the gold for further action under the Customs Act, 1962. The court criticized the police for delays and resistance in handing over the gold to the DRI, emphasizing the need for prompt action in such cases. Additionally, the court recommended disciplinary action against police officials for their mishandling of the investigation.

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Issues Involved:
1. Legality of the Judicial Magistrate's order regarding the interim custody of seized gold.
2. Jurisdiction and authority of the police versus the Directorate of Revenue Intelligence (DRI) in handling smuggled goods.
3. Compliance with the Customs Act, 1962.
4. Investigation procedures and the role of different authorities in the case.

Detailed Analysis:

1. Legality of the Judicial Magistrate's Order:
The petitioner, the Senior Intelligence Officer of the Directorate of Revenue Intelligence (DRI), sought to set aside the order dated 22.09.2021 by the Judicial Magistrate No.II, Tambaram, which directed the return of 9 kgs of gold to the court after the completion of the investigation or when the property is not necessary. The petitioner argued that the lower court should have granted custody of the gold without any conditions, as it was essential for the investigation and further proceedings under the Customs Act, 1962.

2. Jurisdiction and Authority:
The petitioner contended that the police, upon discovering that the seized gold was smuggled, should have immediately informed the DRI or Customs Authorities, as they are the specified authorities to investigate such cases. The police's failure to do so and the subsequent resistance to hand over the gold to the DRI created obstacles in initiating confiscation proceedings. The court noted that the Inspector of Police and his superior officers did not act promptly in informing the DRI, which necessitated further investigation into their conduct.

3. Compliance with the Customs Act, 1962:
The DRI argued that the seized gold, being of foreign origin and smuggled into India, was liable for absolute confiscation under Section 111 of the Customs Act, 1962. The gold was marked with "sam 1 KILO GOLD 995.0 sam MELTER ASSAYER," indicating its origin from SAM Precious Metals, UAE. The court emphasized that the lower court should have facilitated the DRI's investigation and disposal of the gold under Section 110 of the Customs Act, 1962, without imposing conditions that hindered the process.

4. Investigation Procedures:
The court examined the status report and explanation provided by the Assistant Public Prosecutor and the Inspector of Police, S5 Pallavaram Police Station. It was revealed that the complainant, Saravanan, initially reported a robbery but later confessed to being part of a conspiracy to smuggle gold. The police investigation led to the arrest of Saravanan and his associates, and the recovery of the gold bars. The court criticized the police for not informing the DRI promptly and for the delay in forwarding the case details to the court.

Conclusion:
The court concluded that the Judicial Magistrate's order imposing conditions on the return of the gold was improper. The DRI should have been given absolute custody of the gold to facilitate further action under the Customs Act, 1962. The court set aside the order dated 22.09.2021, allowing the DRI to retain and dispose of the gold as per the provisions of the Customs Act. The court also suggested that the Director General of Police, Chennai, take appropriate action against the erring officials for their lapses in handling the case.

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