Settlement Without Declaration Under Customs Act Upheld, Dissent on Goods Specified in Section 123

The court held that the judgment of the Bombay High Court in a similar case correctly interprets the law, allowing for settlement even without declaration under Section 77 of the Customs Act. The court rejected preliminary objections and directed the Settlement Commission to consider the petitioner's application on its merits. A separate judgment by Justice Sanjay Karol dissented, arguing against settlement for cases involving goods specified under Section 123, stating that it undermines the legislative intent of the Customs Act. Justice Karol suggested remitting the matter to adjudicating authorities for further action.

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Issues Involved:
1. Personal Liberty under Article 21 of the Constitution.
2. Right to Settlement under Chapter XIV A of the Customs Act.
3. Jurisdiction of the Settlement Commission.
4. Conflict between High Court Judgments.
5. Preliminary Objections on Maintainability.
6. Interpretation of Sections 123 and 127B of the Customs Act.
7. Exercise of Powers under Article 32 of the Constitution.

Issue 1: Personal Liberty under Article 21 of the Constitution
The writ petition filed under Article 32 raises an issue of huge importance regarding personal liberty under Article 21, specifically concerning the right of an accused under the Customs Act to settle disputes as per Chapter XIV A of the Customs Act.

Issue 2: Right to Settlement under Chapter XIV A of the Customs Act
The petitioner, an NRI, was arrested on suspicion of smuggling high-value goods through the green channel at Delhi International Airport. The petitioner sought permission for home-cooked food and expressed willingness to settle dues under Section 127 of the Customs Act. However, the customs authorities had not initiated the settlement process, prompting the petitioner to file an I.A. seeking the same.

Issue 3: Jurisdiction of the Settlement Commission
An ex-parte order directed the Commissioner of Customs to issue a show-cause notice to the petitioner. The respondent filed an application to recall this order, raising jurisdictional issues. The ex-parte order was recalled, and both parties argued at length on the merits.

Issue 4: Conflict between High Court Judgments
The petitioner pointed out a conflict between judgments of the Bombay High Court and the Delhi High Court, which could harm accused persons charged under the Customs Act by depriving them of the settlement remedy.

Issue 5: Preliminary Objections on Maintainability
The respondent raised a preliminary objection, arguing that the original relief sought was limited to home-cooked meals for undertrial prisoners, making this court an inappropriate forum to resolve the conflict between High Court judgments. The court rejected this objection, stating that it is equipped to clear the ambiguity and prevent future multiplicity of proceedings.

Issue 6: Interpretation of Sections 123 and 127B of the Customs Act
The court analyzed Sections 123 and 127B, noting that Section 123 shifts the burden of proof to the accused in cases of smuggling. However, in cases of seizure within the customs area, this burden of proof becomes redundant. The court concurred with the Bombay High Court's judgment in Union Of India vs Suresh Raheja, which allowed settlement for goods seized within the customs area.

Issue 7: Exercise of Powers under Article 32 of the Constitution
The court emphasized the importance of Article 32 as a fundamental right to protect other fundamental rights. The court held that it is not bound by the relief sought and can go beyond the original relief to meet the ends of justice. The court also noted that the conflicting decisions of the High Courts necessitated a clarification to ensure uniformity in the law.

Conclusion:
The court concluded that the judgment rendered by the Bombay High Court in the Suresh Raheja case expounds the correct position of law and approved the same. The court clarified that non-declaration under Section 77 of the Customs Act does not bar the statutory remedy of settlement. The court rejected the preliminary objections raised by the respondent and directed that if a settlement application is filed by the petitioner, it should be dealt with by the Settlement Commission on its merits. The writ petition and applications were disposed of accordingly.

Separate Judgment by Sanjay Karol, J.:
Justice Sanjay Karol disagreed with the majority opinion, emphasizing that the proviso to Section 127B bars the settlement of cases involving goods specified under Section 123. He argued that the legislative intent behind the Customs Act is to sternly deal with smuggled goods and that allowing settlement for such goods would undermine the Act's purpose. He also questioned the maintainability of the petition under Article 32, as the original relief sought was unrelated to the merits of the present dispute. He concluded that the matter should be remitted to the adjudicating authorities for appropriate action.

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