2025 (7) TMI 940 - HC - Customs

Delhi HC quashes criminal complaint under Section 174 IPC for customs summons non-compliance, rules Customs Act prevails over general law

Delhi HC quashed criminal complaint filed under Section 174 IPC against petitioner for non-compliance with customs summons. Court held that Customs Act ... Validity of Criminal Complaint for noncompliance of summons - Allegation of Evasion of Customs Duty - summons were issued to the Petitioner as well as the Surety, even though no surety has been furnished by the Petitioner till then - failure to appear before the DRI in response to summons u/s 108 Customs Act - Violation of principles of natural justice - invocation of Section 174 IPC - non-application of mind while passing the order - HELD THAT:- Where there is a Special Code, which contains all the provisions for investigations as well as penalties then, it shall prevail over the general law of the country. This aspect of the Customs Act prevailing over the general law as provided in Cr.P.C. was considered in detail by the High Court of Punjab and Haryana in the case of Rakesh Kumar Goyal [2024 (5) TMI 945 - PUNJAB AND HARYANA HIGH COURT]. It was observed that under Section 108 Customs Act, enables any Gazetted Officer of Customs has the power to summon any person whose attendance he considers necessary and also ask for the production of certain specified documents or things as mentioned therein. No doubt, there is no specific provision to take action for violation of Section 108 Customs Act, but Section 117 Customs Act provides that any person contravening any provision of the Act or abetting any such contravention or fails to comply with provisions of the Act with which it was his duty to comply and no express penalty is provided for such contravention or failure, it shall be liable to be dealt under S. 117 Customs Act to impose a penalty upon him. Sections 174/175 IPC provides punishment for committing offences for non-attendance or omission to produce document or electronic record by a person legally bound to produce, in obedience to an Order from the public servant - In the case of Delta Impex vs. Commissioner of Customs, [2004 (2) TMI 81 - HIGH COURT OF DELHI] and Enforcement Directorate vs. M. Samba Siva Rao [2000 (5) TMI 586 - SUPREME COURT], it was observed that Customs Act itself is a complete Code and provides for various stages of investigations, imposition of penalties, settlement of cases and Appeals. In the present case, the Complaint has been filed on account of disobedience of one summon dated 15.09.2017 issued under Section 108 Customs Act, which is disobedience of any officer under the Act and is therefore, penal under Section 117 Customs Act itself. The resort could not have been made to Section 174/175 IPC. The Complaint is therefore, liable to be quashed - Merely because he did not join investigations on one date i.e. 15.09.2017, NBW got issued vide Order dated 22.01.2018 which is clearly reflective of the abuse of the powers by the Customs Officer. This is a blatant example where the Customs Officer has abused their powers to somehow corner the Petitioner who otherwise, has throughout been cooperating and joining the investigations. On this ground as well, the Petition is liable to be quashed. The Criminal Complaint No. 26460/2017 (now re-numbered as 6903/2018) under Section 174 IPC is hereby quashed and all the proceedings undertaken therein also stand quashed - Application disposed off. ISSUES PRESENTED AND CONSIDERED 1. Whether a Criminal Complaint under Section 174 IPC can be maintained for alleged non-compliance with a summons issued under Section 108 of the Customs Act, or whether the special regime of the Customs Act (including Section 117) precludes resort to general penal provisions of the IPC in such circumstances. 2. Whether issuance of non-bailable warrants (NBWs) for non-appearance in response to a single summons under Section 108 Customs Act, in the factual matrix of the case (prior cooperation, interim/provisional release orders, deposits of duty/penalty and pendency of anticipatory bail proceedings), amounted to arbitrary exercise/abuse of power justifying quashing of the Complaint and the NBWs under Section 482 Cr.P.C. 3. Ancillary question: whether defects in the service/issuance of the summons (e.g., affixation at residence while person was out of station) and the manner of proceeding by the investigating authority bear on maintainability of criminal proceedings under IPC or on the propriety of coercive process. ISSUE-WISE DETAILED ANALYSIS Issue 1: Competence to invoke Section 174 IPC for non-compliance with summons under Section 108 Customs Act Legal framework: Section 4 and 5 Cr.P.C. establish that offences under special enactments are to be dealt with according to their own provisions where a special law regulates the manner of investigation/penalty; Section 108 Customs Act empowers a Gazetted Customs Officer to summon persons and require production of documents; Section 117 Customs Act provides for penalty where a person contravenes or fails to comply with provisions of the Act where no express penalty is provided elsewhere; Sections 174/175 IPC penalise non-attendance/omission to produce documents when legally bound by an order of a public servant. Precedent treatment: The Court followed and relied on authorities holding that the Customs Act is a complete code (Delta Impex; Enforcement Directorate v. M. Samba Siva Rao) and on precedents (Rakesh Kumar Goyal; Saroj K. Dutta; Meera Kapoor) that Section 108 non-compliance is amenable to Section 117 remedies and that the special Act prevails over general criminal provisions under Section 4/5 Cr.P.C. The Court also cited analogous decisions where special statutory remedies prevailed (General Manager Telecom v. M. Krishnan; Jasbir Singh). Interpretation and reasoning: The Court reasoned that where a special enactment (Customs Act) provides for the method of summoning, penalties and a specific penal provision (Section 117) to deal with contraventions, resort to the general penal provisions of IPC for the same act is impermissible. Had Section 117 not existed, Sections 174/175 IPC might have been invoked; but given the statutory scheme, proceedings under IPC for disobedience of Section 108 summons are not the appropriate route. The Court accepted the view that Section 4/5 Cr.P.C. mandates application of the special code when it governs the matter. Ratio vs. Obiter: Ratio - where a special statutory code (Customs Act) prescribes a penalty/remedial regime for non-compliance with its summons provisions (Section 108), recourse to general IPC offences (Sections 174/175) is not permissible; the special law (Section 117) supplants the general penal route. Obiter - supporting examples from other statutes and some illustrative case law comparisons were discussed but do not alter the core ratio. Conclusion: The Complaint under Section 174 IPC premised on non-compliance with a Section 108 summons was not maintainable; the respondent should have proceeded under the Customs Act (Section 117) and not under IPC. Issue 2: Whether issuance of NBWs and filing of the second Complaint constituted abuse of process / arbitrary exercise of power Legal framework: Judicial powers under Section 482 Cr.P.C. to quash proceedings found to be an abuse of process; principles limiting coercive procedure and requiring its sparing use; Section 87 Cr.P.C. (referred to in argument) limits indiscriminate issuance of warrants; general requirement that issuance of NBWs be justified by necessity rather than mechanical practice. Precedent treatment: The Court relied on authorities cautioning against mechanical issue of warrants (Suresh V. Chaturvedi) and on the well-established principle permitting quashing of proceedings that are an abuse (State of Haryana v. Bhajan Lal). It also relied on precedents recognizing illness or incapacity as valid excuses (King Emperor v. Bohra Bir Bal; Mehmood Ul Rehman) to contextualize non-appearance exceptions. Interpretation and reasoning: The Court found significant factual features: petitioner's prior and subsequent cooperation with investigation (multiple appearances and statements), substantial deposits of duty/penalty, a pending anticipatory bail application, provisional release orders with onerous conditions, and that the impugned summons was arguably one isolated instance of non-appearance. Given these facts, issuance of NBWs (after a second Complaint and on one default) was disproportionate and reflected abuse/misuse of the process designed to coerce presence rather than to further investigation. The fact that this was the second Complaint of similar character reinforced the view of a pattern aimed at harassment rather than securing attendance. The Court emphasized that NBWs have serious liberty implications and must not be issued mechanically. Ratio vs. Obiter: Ratio - where (i) a person has otherwise cooperated with statutory investigations, (ii) joined proceedings on multiple occasions, (iii) averments show plausible reasons for a single omission (e.g., awaiting judicial outcome, absence from station), and (iv) coercive process is resorted to mechanically or repetitively, the Court may quash NBWs and associated criminal complaints under Section 482 as an abuse of process. Obiter - discussion of the exact threshold for issuing NBWs in other contexts and comparative statutory examples are illustrative but not essential to the holding. Conclusion: Issuance of NBWs and the criminal complaint in the facts of the case were arbitrary and an abuse of power; therefore the Complaint and NBWs were quashed. The Court preserved the authority of the Customs department to pursue remedies under the Customs Act. Issue 3: Effect of defective service/issuance of summons on maintainability and propriety of proceedings Legal framework: Statutory service requirements (Section 153 Customs Act for service/display) and general principles that defective service or failure to follow prescribed procedure vitiates consequent coercive orders if such defects materially affect the accused's opportunity to appear. Precedent treatment: Authorities acknowledging that incapacity/absence can excuse non-appearance (King Emperor; Mehmood Ul Rehman) and decisions cautioning courts against immediate coercive measures where procedural irregularities exist were noted. The Court referred to materials where summons were pasted due to absence and consequences of such practice. Interpretation and reasoning: The Court noted that one summons (dated 22.07.2017) was affixed at the petitioner's door while he was out of station, and that later summons were sent to counsel and displayed on notice boards. On the specific complaint before the Court, the material indicated that the petitioner had legitimate reasons and had earlier joined investigations; accordingly a single instance of alleged defective service and one missed date could not justify the extreme step of NBWs. While the Court did not hold the summons procedure wholly invalid, it treated the service circumstances as a factor contributing to the conclusion of abuse of process. Ratio vs. Obiter: Ratio - defective service and the manner of summons issuance, when coupled with prior cooperation and other mitigating circumstances, may tilt the balance against issuing coercive process; Obiter - general rules on service mechanics and hypothetical consequences were discussed. Conclusion: Service irregularities, considered with the overall conduct of the petitioner and investigatory context, supported the view that NBWs were disproportionate; such defects reinforced the Court's decision to quash the criminal proceedings under IPC. Overall Disposition The Criminal Complaint under Section 174 IPC and the NBWs issued thereunder were quashed on two independent grounds: (a) the Customs Act supplies the special statutory remedy (Section 117) for non-compliance with Section 108 summons and thus IPC provisions were not the appropriate route; and (b) issuance of NBWs in the factual matrix constituted an abuse of process/ arbitrary exercise of power. The decision leaves open the respondents' right to proceed under the Customs Act in accordance with law.