2024 (9) TMI 256 - HC - Customs

Customs Appraiser acquitted of fraud conspiracy charges after appeal court finds insufficient evidence of active participation

H.K. Hirani Versus The Central Bureau of Investigation, Anti-corruption Branch, Tanna Mumbai., The State of Maharashtra.

The Bombay HC allowed the appeal of a Customs Appraiser convicted under IPC Sections 420, 467, 468, 120B and Prevention of Corruption Act for criminal ... Conviction and imposition of sentencesoffence punishable under 420, 467, 468, 120B of the IPC and Section 5 (2) and 5 (1) (d) of the Prevention of Corruption Act, 1988 - Petitioner was working as Appraiser in the office of Collector of Customs - criminal conspiracy involving substitution of original writ petitions with fake ones for the purpose of cheating - obtaining gain for themselves or for any other person due to the criminal conspiracy and by dishonestly and fraudulently misappropriating or otherwise converting the amount which was entrusted to them as public servants and allowing Accused No. 5-Mr. K.P. Shah to obtain refund orders. HELD THAT:- On the basis of the evidence of PW 3 and PW 4, it is concluded by the learned trial Judge that the Petition was filed in the name of a ghost entity to claim the amount of refund and in the statement under Section 313 of Cr.P.C, Accused No. 4-Mr. K.P. Shah answered that he knew Mr. Pinakin Mody and the application for refund of Pinakin Mody was filed by him. He admitted that PW 4 given papers of M/s Jirat Chemicals for making application of refund and not for filing of the Writ Petition. It could be thus easily inferred that there was no Writ Petition filed by M/s Jirat Chemicals and its partners and Pinakin J. Shah was a fictitious entity, which was set up by Mr. K.P. Shah, in a unique way of claiming the refund in his name. From the evidence of Prakash Jaitpal (PW 15), once against the same modus operandi has featured before the learned Judge as Exh. ‘H’ was also a fictitious document. As far as the present Appellant is concerned, by the Judgment dated 26/06/1997, he was found guilty of entering into criminal conspiracy with Accused No. 4-Mr. K.P. Shah of fraudulently and dishonestly claiming refund of countervailing /additional custom duty, by substituting original Writ Petition No. 304 of 1987 with fake and fictitious Writ Petition (Exh.49) and was sentenced to suffer R.I. for a term extending to seven years. In addition, he was held guilty under Section 5 (2) read with Section 5 (1) (d) of the Prevention of Corruption Act, 1947 and sentenced to suffer R.I. for a term extending three years. Both the sentences imposed upon the Appellant were directed to run concurrently. The Appellant, who was already on bail, was directed to be released on furnishing fresh bail bond in the sum of Rs. 1,00,000/- with one or more sureties. As far as the accused persons i.e. Accused Nos. 2, 3 and 5 are concerned, they were acquitted and the bail bonds issued by them was cancelled. As far as the accusations against the present Appellant is concerned, it stand on the same footing, as in the other three criminal cases and, the common witnesses were examined, including the key witness, Mr. Prakash Jaitpal (PW 15), who deposed in sync with his earlier evidence that he was working with Mr. K.P. Shah and he had seen Mr. K.P. Shah, meeting Accused No. 2 at Lalit Restaurant - The evidence surfaced on record in this case is on similar lines as in earlier two cases, on the basis of which the conviction of the Appellant is recorded under Section 120-B of IPC alongwith Mr. K.P. Shah. Since the prosecution has failed to prove the act of conspiracy or that the Appellant-Mr. Hirani has played any active role in substituting the Writ Petition and assisting Mr. K.P. Shah in getting the refund from the Customs Department, even in this case, the Appellant is entitled for an acquittal from the finding of conviction under Section 120-B of IPC and Section 5 (2) read with Section 5 (1) (d) of the Prevention of Corruption Act, 1947. By setting aside the conviction as well as the sentence imposed upon him, the appeal is allowed. Issues Involved:1. Conviction of the appellant under multiple sections of IPC and Prevention of Corruption Act.2. Alleged criminal conspiracy involving substitution of original writ petitions with fake ones.3. Procedures and verification processes in the Customs Department.4. Role and culpability of various accused persons, including the appellant.5. Evidence and testimonies provided by prosecution and defense witnesses.6. Legal and procedural errors in the trial court's judgment.Detailed Analysis:Issue 1: Conviction of the appellant under multiple sections of IPC and Prevention of Corruption Act.The appellant, Mr. Hirani, was convicted under Sections 420, 467, 468, 471 of IPC, and Sections 5(2) and 5(1)(d) of the Prevention of Corruption Act, 1988. He was sentenced to suffer 7 years of rigorous imprisonment on each count, with the sentences running concurrently. The conviction was based on allegations of criminal conspiracy, cheating, and forgery related to the fraudulent refund of customs duty.Issue 2: Alleged criminal conspiracy involving substitution of original writ petitions with fake ones.The prosecution alleged that Mr. Hirani, along with other accused persons, conspired to cheat the Customs Department by substituting original writ petitions with fake ones to claim higher refunds. The key evidence included the discrepancies between the original writ petitions filed in court and the copies received by the Customs Department. The prosecution argued that these substitutions were part of a deliberate conspiracy to defraud the government.Issue 3: Procedures and verification processes in the Customs Department.The judgment detailed the standard procedures for processing refund claims in the Customs Department, including the necessity of verifying original and duplicate bills of entry. Witnesses from the Customs Department testified about the usual practices and the deviations observed in the cases involving the appellant. The prosecution argued that the appellant failed to follow these procedures, thereby facilitating the fraudulent refunds.Issue 4: Role and culpability of various accused persons, including the appellant.The trial court found Mr. Hirani guilty of being part of the conspiracy, primarily based on his role in signing the refund orders. However, the judgment also highlighted the involvement of other Customs Department officials and the main accused, Mr. K.P. Shah, who orchestrated the fraudulent scheme. Despite the involvement of multiple individuals, the trial court's judgment focused on Mr. Hirani's actions, leading to his conviction.Issue 5: Evidence and testimonies provided by prosecution and defense witnesses.The prosecution presented several witnesses, including Customs Department officials, private individuals, and bank managers, to establish the fraudulent activities and the appellant's involvement. The defense argued that the prosecution failed to provide conclusive evidence linking Mr. Hirani to the conspiracy. The defense also highlighted procedural lapses and inconsistencies in the prosecution's case.Issue 6: Legal and procedural errors in the trial court's judgment.The appellate court found significant errors in the trial court's judgment, particularly in attributing the conspiracy solely to Mr. Hirani. The appellate court noted the lack of concrete evidence proving Mr. Hirani's involvement in the substitution of writ petitions and the issuance of fraudulent refund orders. The appellate court emphasized that mere suspicion could not replace the need for concrete proof of guilt.Conclusion:The appellate court set aside the trial court's judgment, acquitting Mr. Hirani of all charges. The court concluded that the prosecution failed to establish the appellant's guilt beyond a reasonable doubt and highlighted the procedural lapses and inconsistencies in the prosecution's case. Consequently, the appellant was acquitted, and the sentences imposed by the trial court were annulled.