2001 (2) TMI 144 - HC - Customs

Customs Act: Pre-arrest bail denied due to prima facie case, medical conditions not sufficient.

The court dismissed the petition for pre-arrest bail as it found the allegations under Section 135 of the Customs Act prima facie established, ... Offence - Bail - Anticipatory bail Issues Involved:1. Pre-arrest bail under Section 438 of the Code of Criminal Procedure, 1973.2. Allegations under Section 135 of the Customs Act, 1962.3. Applicability of Sections 11, 50(2) of the Customs Act and Section 67 of the Foreign Exchange Regulation Act (FERA).4. Repeal of FERA and its implications.5. Medical grounds for anticipatory bail.6. Necessity of custodial interrogation.7. Allegations of harassment by the investigating agency.Detailed Analysis:1. Pre-arrest Bail under Section 438 of Cr. P.C.:The petitioner sought pre-arrest bail under Section 438 of the Code of Criminal Procedure, 1973, claiming innocence and apprehending unnecessary harassment. The respondent opposed the bail, arguing that the offenses were serious and required custodial interrogation for proper investigation.2. Allegations under Section 135 of the Customs Act:The petitioner was accused of floating fictitious firms to fraudulently claim duty drawback benefits, amounting to Rs. 2.07 crores already obtained, with Rs. 12.9 crores yet to be received. The prosecution alleged that the petitioner used dummy proprietors and withdrew the duty drawback amounts himself. The petitioner denied any connection with the fictitious firms and claimed no incriminating evidence was found during searches.3. Applicability of Sections 11, 50(2) of the Customs Act and Section 67 of FERA:Section 135 of the Customs Act provides punishment for evasion of duty or violation of prohibitions. The court explained that Section 135(1)(a) covers situations where goods are dutiable and duty is not paid, or where the import/export of goods is prohibited under the Customs Act or any other law. Section 11 of the Customs Act empowers the Central Government to prohibit the import/export of goods. Section 50(2) mandates that exporters declare the truth of the contents in the shipping bill. Section 67 of FERA deems prohibitions under Section 18(1)(a) of FERA as prohibitions under Section 11 of the Customs Act.4. Repeal of FERA and its Implications:The petitioner argued that since FERA was repealed, no offense under the Act was made out. However, the court noted that under Section 49(4) of FEMA, any offense committed under the repealed Act (FERA) would continue to be governed by its provisions. Therefore, the provisions of FERA, 1973, applied to the alleged offenses.5. Medical Grounds for Anticipatory Bail:The petitioner claimed to be suffering from ischemic heart disease, diabetes, and hypertension, and argued for anticipatory bail on medical grounds. The court referred to a Supreme Court decision which stated that economic offenders often claim medical issues, and authorities must take adequate measures to prevent health deterioration during custodial internment.6. Necessity of Custodial Interrogation:The court found that despite the petitioner's claim of joining investigations, the nature of allegations, gravity of the offense, and the need for thorough investigation necessitated custodial interrogation. The court emphasized that considerations for pre-arrest bail differ from post-arrest bail applications.7. Allegations of Harassment by the Investigating Agency:The petitioner failed to establish any material evidence showing unnecessary harassment by the investigating agency. The court noted the serious allegations involving a significant amount of foreign exchange and concluded that granting anticipatory bail would impede proper and effective investigations.Conclusion:The petition for pre-arrest bail was dismissed, as the court found no merit in the petitioner's arguments. The court determined that the allegations under Section 135 of the Customs Act were prima facie made out, and custodial interrogation was necessary for a proper investigation. The petitioner's medical condition and claims of harassment were not sufficient grounds for granting anticipatory bail.