2022 (7) TMI 884 - HC - Customs

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 ... Smuggling - Gold Bars - reason to believe that the Gold Bars are of Foreign Origin - Absolute Confiscation - Section 110 of the Customs Act, 1962 - How the Inspector of Police, even after coming to know that the property is the smuggled gold, from a restricted customs area, he continue with the investigation, that too, without informing to the Customs Authorities? - On what basis the Assistant Public Prosecutor, attached to the Judicial Magistrate No.II, Alandur, raised objection for returning the property to the Directorate of Revenue Intelligence Officer, Chennai? - HELD THAT:- On the very first day, the 1st respondent Police was very much aware that the gold bars are with foreign origin and the assessor had given a report about the purity of the gold confirming that it is smuggled gold. The right thing should have been done by the 1st respondent Police Officer is that he has to inform the customs/DRI authorities, but it has not done. Even the superior officers with whom the Inspector of Police/1st respondent Police had regular communication about the case, for the reasons best known, kept quite. Only after the DRI authorities facing resistance and sensing some mischiefs, had informed the Commissioner of Police about the entire episode and whatever tracking and information they could collect. Thereafter, the local police upto the Joint Commissioner level had started giving information. On the query of the Commissioner of Police, the case gained momentum everything was informed to the Court. Thereafter, the DRI's query was responded and the petition was filed before the lower Court. It is also seen that the Police had acted in alacrity, but nothing was forwarded to the Court then and there immediately. It is certain that the Inspector of Police Mr.Ravi would not have conducted the investigation without the aid and support of his superior officials like the Deputy Commissioner and the Joint Commissioner and others. For what reason, the collected evidence was withheld and why there was so much resistance in handing over the gold bars is not known. This needs a probe to clear the mystery. Hence, this Court leave it to the wisdom of the Director General of Police, Chennai to take appropriate action against the erring officials in this regard. It is seen from the investigation that the property viz., 9 Kgs of Foreign origin gold, appeared to have been smuggled into India, through Chennai Airport, by Qatar Airways Flight, from Qatar, on 23.08.2021, engaging the services of Flight cleaning staff and Flight Catering Staff, with the active involvement of the 2nd Respondent and others. On investigation, the smuggled gold produced before the jurisdictional Court - The Magistrate ought to have ordered custody of the smuggled gold to the absolute custody of the petitioner herein, vesting the right to dispose it off under Section 110 of the Customs Act, 1962, facilitating further action under the said Act. Hence, this Court is inclined to set aside the order dated 22.09.2021. The attested Mahazar copy can be used as document to prove the case in Crime No.437 of 2021. The foreign sealed gold bar are the property to be retained and disposal by the DRI / Customs The order of the lower Court, in imposing the condition to return back 9 Kgs of gold bar, is not proper. This Criminal Original Petition stands allowed. 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.