TaxTMI 
TaxTMI 
2021 (2) TMI 1218
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...., J. 1. This batch of criminal appeals are directed against the orders passed by the learned Judge presiding over the Special Court for trial of NIA Cases, Ernakulam on applications for bail submitted by various accused in R.C. 2/2020/NIA/KOC. It is seen that two common orders are passed by the learned Judge of the Special Court. Bail was granted to accused 8, 9, 11, 14, 16, 17, 18, 19, 21, 22, 23 and 24 as per order dated 15.10.2020 and to accused 17 and 18 as per order dated 23.10.2020. Both the orders are challenged before this Court by the Union of India represented by the National Investigation Agency, Kochi ("NIA", in short). 7Th accused, whose bail plea was rejected, has preferred a separate appeal challenging the order dated 15.10.2020. Since identical factual and legal questions arise in all these cases, they are heard together. We dispose them by this common judgment. 2. Heard Shri Surya Prakash V. Raju, learned Additional Solicitor General of India (ASG) and Shri Arjun Ambalapatta, learned prosecutor for NIA and Shri S. Sreekumar, Shri Vipin Narayan, Shri V.T. Raghunath, Shri M. Balagopal, Shri Babu S. Nair, Shri Nireesh Mathew, Shri E. Ahamed Fazil and Shri Manu T....
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....acquitted in that case. 5. Allegation against accused 13 and 14 is that they had associated with accused 1, 4, 5, 6 and 7 to smuggle gold 21 times in various forms and after November 2019, they assisted other accused persons for exchanging the smuggled gold at various places. 16th accused had conspired with 8th accused and arranged funds for smuggling gold multiple times in June 2020 through the diplomatic channel. 19th accused had funded Rs. 65 lakhs for smuggling gold since June 2020 and obtained 1.5kgs of smuggled gold at Thiruvananthapuram on multiple occasions. He did so by conspiring with accused 5, 6, 7 and 16. It is further alleged that 21st accused had conspired with accused 8, 16 and 23 and handed over Rs. 70 lakhs during June 2020 for purchasing smuggled gold. He had also travelled to Thiruvananthapuram along with accused 16 and 23 to receive the smuggled gold from accused 4 and 5 in the month of June 2020. Accusation against 22nd accused is that he had funded Rs. 1.25 crore each on three occasions for obtaining smuggled gold through the above said channel. It is further alleged that he had associated with accused 7, 17 and 22. 23rd accused also conspired with accused....
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....o complete the investigation, the court below should not have granted bail to some of the accused persons. 7. Per contra, learned counsel appearing for the accused contended that despite consuming much time, the investigating agency could not find out any reason justifying further detention of the accused persons. It is also contended that Section 15 of the UA(P) Act is totally inapplicable to the facts of this case. In the appeal filed by 7th accused, he questioned the legal and factual reasons stated by the trial court for denying bail. 8. Learned ASG contended that the court below viewed the matter as a simple case of smuggling. According to him, the inconsistent views taken by the learned Judge can be seen on a conjoint reading of paragraphs 2 to 6, wherein the facts have been mentioned, and in paragraph 19, it is indicated that the case on hand is a mere act of smuggling gold without attracting the offence of "terrorist act" as defined under Section 15 of the UA(P) Act. 9. At the outset, the learned counsel appearing for the accused persons canvassed a proposition that the appeals filed by NIA are incompetent as they were not properly instituted before this Court. It ....
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.... of this Court in State of Kerala v. Krishnan (1981 KLT 839) and Benny P. Jacob and another v. Rajesh Kumar Unnithan and another (2019 KHC 737). In Krishnan's case, the Division Bench noticed the admitted fact that the State had filed appeals against an acquittal through Additional Advocate General at a time when admittedly there was no public prosecutor appointed for the High Court. Therefore, the question was whether the State Government could have directed the Advocate General or Additional Advocate General to present an appeal under Section 378(1) of Cr.P.C. without appointing them as public prosecutors under Section 24(1) of Cr.P.C. in view of Article 165 of the Constitution of India and the Rules framed by the Government under Clauses 2 and 3 of Article 165. The Bench, after an elaborate consideration, refused leave to appeal sought for by the State finding that the appeals were not filed by the public prosecutor as required under Section 378(1) of Cr.P.C. Following this decision, another Bench in Benny P. Jacob held that the appeal preferred by the State could be treated as defective as it was not preferred by the State public prosecutor. It is therefore forcefully argue....
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....ing of Section 24(8) of Cr.P.C. and Section 15 of NIA Act, it will be clear that the appeals are properly laid before this Court. Section 378(1)(b) of Cr.P.C. specifically says that the State Government may direct the public prosecutor to present an appeal to the High Court from an original or appellate order of acquittal passed by any court other than a High Court. Interpreting this provision, in Krishnan and Benny P. Jacob (supra) it was held that what is important is the presentation of criminal appeals under Section 378 of Cr.P.C. through a public prosecutor appointed under Section 24 of Cr.P.C. Section 15 of NIA Act is extracted hereunder as it is also relevant for our purpose: "Public Prosecutors.-(1) The Central Government shall appoint a person to be the Public Prosecutor and may appoint one or more persons to be the Additional Public Prosecutor or Additional Public Prosecutors: Provided that the Central Government may also appoint for any case or class or group of cases a Special Public Prosecutor. (2) A person shall not be qualified to be appointed as a Public Prosecutor or an Additional Public Prosecutor or a Special Public Prosecutor under thi....
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....peal was dismissed by the High Court for two reasons. First, the appeal for enhancement of sentence under Section 377(2) of Cr.P.C. could be filed by the public prosecutor duly authorized by the Central Government and the special public prosecutor appearing on behalf of the appellant fairly admitted that the complainant was not empowered by the Central Government to file the appeal. Second, the appeal was not filed by the public prosecutor as contemplated under Section 377(2) of Cr.P.C., but it was filed by the special public prosecutor. The first ground on which the appeal was dismissed is affirmed by the Supreme Court. However, in respect of the second ground the following observations are made: "6. This submission of the learned Additional Solicitor-General requires to be accepted. Section 24(8) CrPC specifically empowers the Central Government or the State Government to appoint a Special Public Prosecutor for conducting any case or class of cases. Such Special Public Prosecutor would be Public Prosecutor for all the purposes under the Act. It cannot be said that the Special Public Prosecutor is not a Public Prosecutor. Hence, the second reason recorded by the High Cour....
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....rrency, coin or of any other material; or (iv) damage or destruction of any property in India or in a foreign country used or intended to be used for the defence of India or in connection with any other purposes of the Government of India, any State Government or any of their agencies; or (b) overawes by means of criminal force or the show of criminal force or attempts to do so or causes death of any public functionary or attempts to cause death of any public functionary; or (c) detains, kidnaps or abducts any person and threatens to kill or injure such person or does any other act in order to compel the Government of India, any State Government or the Government of a foreign country or an international or inter-governmental organization or any other person to do or abstain from doing any act; or commits a terrorist act. Explanation.-For the purpose of this sub-section,- (a) "public functionary" means the constitutional authorities or any other functionary notified in the Official Gazette by the Central Government as public functionary; (b) "high quality counterfeit Indian currency" means the counterfeit currency as may be decla....
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....r firearms or other lethal weapons or poisonous or noxious gases or other chemicals or by any other substances (whether biological radioactive, nuclear or otherwise) of a hazardous nature, the unity, integrity, etc. of the nation could be threatened or terror could be struck in people or any section of the people in India or in any foreign country. Clause (a) makes it abundantly clear that the illustrations of criminal acts therein are not exhaustive. The effects produced by such acts are dealt with in Sub-clauses (i) to (iv) thereunder. If by using bombs, dynamites, etc, death or injuries to any person or persons occur, it will be a terrorist act under Sub-clause (i). Likewise, under Sub-clause (ii), by using bombs, dynamites, etc. if loss or damage or destruction of property has happened, then also it will fall within the definition of terrorist act. Similarly, the disruption of any supplies or services essential to the life of the community in India or in any foreign country caused by any of the means referred to above will also be a terrorist act. Most importantly, under Sub-clause (iiia) to Section 15(1)(a) by any means of whatever nature if any damage to the monetary stabilit....
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....rson to do or abstain from doing any act; or" shall be substituted;"; (iv) after clause (c), the following clause shall be inserted, namely:- "(d) demands any bomb, dynamite or other explosive substances or inflammable substances or fire arms or other lethal weapons or poisonous or noxious or other chemicals or any biological, radiological, nuclear material or device with the intention of aiding, abetting or committing terrorism."; (v) for the Explanation, the following Explanation shall be substituted, namely:- 'Explanation.-For the purpose of this section,- (a) "public functionary" means the constitutional authorities or any other functionary notified in the Official Gazette by the Central Government as public functionary: (b) "high quality counterfeit currency" means the counterfeit currency as may be declared after examination by an authorized or notified forensic authority that such currency imitates or compromises with the key security features as specified in the Third Schedule.'; (v) after sub-section (1), the following sub-section shall be inserted, namely:- "(2) The terrorist act under sub-sec....
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....zation against which any person indulges in acts described in clause (c) of section 15, since the existing provision does not explicitly mention such international or inter-governmental organization. (iii) act of demanding any bomb, dynamite or other explosive substances or inflammable substances or fire arms or other lethal weapons or poisonous or noxious or other chemicals or any biological, radiological, nuclear material or device with the intention of aiding, abetting or committing terrorism; xxxxxx" 22. It is contended by the learned counsel for the accused that Section 15(1)(a)(iiia) cannot be invoked in the facts of the case to hold that the alleged activities by the accused amounted to a terrorist act. According to them, a smuggling activity simplicitor cannot amount to a terrorist act under the scheme of UA(P) Act. Forcefully it is argued that NIA has no authority to investigate into an offence of smuggling defined under Section 2(39) of the Customs Act, 1962 ("Customs Act", in short). It is pointed out that in the Schedule attached to the NIA Act, dealing with specified enactments, the Customs Act is not included. Specific case advanced by the learned....
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....pparent commercial purpose and customer buying gold bullion and using a general post office or private service provider, mail box as their address, without listing a corresponding box number are some of the instances of customer behaviour. Insofar as the trade based behaviour (also related to trade based money laundering) is concerned, cash payments for high value orders are indications of trade based money laundering activity. It is therefore argued on behalf of NIA that these aspects could be unearthed only on a wide spread probe involving scrutiny of voluminous evidence recovered in the paper form and also decoded from the electronic gadgets. It is true that the case involves a lot of transactions connecting various accused persons and accomplices. We are of the view that the investigating agency is justified in taking time for completing a threadbare investigation into all the aspects. 24. At the same time, the contention of the accused persons that the materials placed before the court at the time of considering their bail applications did not reveal any of the offences charged against them has also to be considered to assess the legality of the impugned order. 25. Learn....
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....nt of objects and reasons to the Bill introduced for amending the statute as shown above. This is the split up of the above Sub-clause to Section 15(1). 28. It is therefore strongly argued that what is sought to be declared as a terrorist act in this Sub-clause is the production, smuggling or circulation of high quality counterfeit Indian paper currency, coin or any other material so as to cause damage to the monetary stability of India. Learned counsel for the accused persons emphasized that the words "high quality counterfeit Indian paper currency, coin or any other material" will have to be understood as one class of items intended to be produced or smuggled or circulated in order to damage the monetary stability of India. In other words, it is contended that high quality counterfeit Indian paper currency or coin cannot be disassociated or separated from the words "any other material". According to them, the principle of ejusdem generis should be applied to interpret this provision. 29. In this context, it will be apposite to consider the wafer-thin distinction between "noscitur a sociis" and "ejusdem generis". According to Black's Law Dictionary the expression "noscit....
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....ause they are neither legal principles nor legal rules. It is hardly correct to speak of them as rules of language for they simply refer to the way in which people speak in certain contexts. They are no more than rough guides to the intention of the speaker or writer." 31. Learned senior counsel for the accused placed reliance on Ishwar Singh Bagga v. State of Rajasthan ( (1987) 1 SCC 101) to contend that high quality counterfeit Indian paper currency, coin or any other material should be read and understood as anything directly related to currency or coin. In the above decision, the Supreme Court considered the interpretation of Section 129-A of the Motor Vehicles Act, 1939 wherein the power to detain vehicles used without certificate of registration or permit had been dealt with. Opening words of the Section showed that any police officer authorized in this behalf or other person authorized in this behalf by the State Government may, if he has reason to believe that a motor vehicle has been or is being used in contravention of the provision of law, he may seize and detain the vehicle. The words "any police officer authorized in this behalf or other person authorized in this be....
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....nd, without unnecessary delay, shall make over or cause to be made over any person so arrested to a police officer, or, in the absence of a police officer, take such person or cause him to be taken in custody to the nearest police station. We are of the view that the expression "other person" mentioned in Section 129-A of the Act which has to be read ejusdem generis with the words 'any police officer' which precede that expression in Section 129-A of the Act can only refer to an officer of the government and not to any officer or employee of any statutory Corporation or to any other private person. We have a similar provision in Section 129 of the Act. That section authorizes the State Government to empower any police officer or other person to exercise the powers under that section. Such police officer or other person may, if he has reason to believe that any identification mark carried on a motor vehicle or any licence, permit, certificate of registration, certificate of insurance or other document produced to him by the driver or person in charge of a motor vehicle is a false document within the meaning of Section 464 of the Indian Penal Code (45 of 1860), seize the mark....
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....4. A class is a conceptual creation taking within its fold numerous categories of persons with similar characteristics. Here in the group of "other persons" fall those who, on full-time basis, are teaching or giving instructions in colleges affiliated with the University and they are also teachers even if they are unapproved. This seems to be the purport of Section 2(35) of the Act. xxxxx 27. The Latin expression "ejusdem generis" which means "of the same kind or nature" is a principle of construction, meaning thereby when general words in a statutory text are flanked by restricted words, the meaning of the general words are taken to be restricted by implication with the meaning of the restricted words. This is a principle which arises "from the linguistic implication by which words having literally a wide meaning (when taken in isolation) are treated as reduced in scope by the verbal context". It may be regarded as an instance of ellipsis, or reliance on implication. This principle is presumed to apply unless there is some contrary indication [see Glanville Williams, The Origins and Logical Implications of the Ejusdem Generis Rule. 7 Conv (NS) 119]. 28. ....
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....s may admit will be favoured. As a learned author puts it: ........... if a class can be found, but the specific words exhaust the class, then rejection of the rule may be favoured because its adoption would make the general words unnecessary; if, however the specific words do not exhaust the class, then adoption of the rule may be favoured because its rejection would make the specific words unnecessary." 33. Sum and substance of the above discussion is that by applying the above mentioned well known rules of interpretation of statutes, we are unable to hold that smuggling of gold simplicitor will fall within Section 15(1)(a) (iiia) of UA(P) Act. In other words, gold smuggling clearly covered by the provisions of the Customs Act will not fall within the definition of terrorist act in Section 15 of UA(P) Act unless evidence is brought out to show that it is done with the intent to threaten or it is likely to threaten the economic security or monetary stability of India. In our view, what is made an offence under Section 15(1)(a)(iiia) of UA(P) Act is causing damage to the monetary stability of India by way of production or smuggling or circulation of high quality counter....
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....emo dated 08.02.2021 with due notice to the opposite side. In the above case, the accused approached the High Court by presenting a petition under Section 482 of Cr.P.C. requesting to quash FIR in respect of a crime registered under Section 16 of UA(P) Act read with Section 120B of the Indian Penal Code, 1860. Allegation against the accused therein is that he had smuggled huge quantity of gold. Prosecution therefore contended that he had smuggled gold with an intent to threaten the economic security of India as provided in Section 15(1)(a)(iiia) of UA(P) Act. It was argued that the words "any other material" do not specifically refer to smuggling of gold. Learned single Judge did not accept this contention. It is observed that smuggling of gold with intent to threaten or likely to threaten the economic security of the country is covered under the smuggling of "any other material". It is clear from the decision that no analysis of the provision was made by the learned single Judge. Moreover, no specific reason has been stated for making the aforementioned observations. It is to be remembered that the learned single Judge was examining whether there was any sufficient reason to quash....
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....e U.A. (P) Act cannot be stretched by interpretative process to include economic security. To understand what exactly security is, as meant by law, the whole section must be read and appreciated carefully. It is quite clear from such interpretation and understanding that the term security meant under the law is the country's security vis-a-vis., law and other situations and internal or external affairs of the country, and not financial or economic fabric. When the parliament in its wisdom realised that economic security of the country also must be brought within the definition of terrorist act, the Parliament inserted the words 'economic security' specifically in Section 15 of the U.A. (P) Act by a specific amendment. Though generally the objects and reasons of a statute cannot be given much weight or value or importance in the process of interpretation, the objects and reasons of the Unlawful Activities (Prevention) Amendment Act, 2012 will clearly indicate that the Parliament inserted words to cover economic security in Section 15 of the U.A. (P) Act because the existing provision did not cover such situations or instances of acts like smuggling or circulation of high....
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.... information or people, such as out of a house or building, into a prison or across an international border in violation of the applicable laws or other regulations. Cambridge Dictionary defines the word "smuggling" as an act or process of taking things or people to or from a place secretly and often illegally. In all cases, smuggling need not be in respect of articles on which a duty could be levied. For example, narcotic drugs or other contraband articles are smuggled at times on which no duty could be levied. In our opinion, "smuggling" is a generic term indicating the illegal transport of various articles. Therefore, this argument raised by NIA cannot be accepted. We are therefore of the view that the learned trial Judge is right in holding that the materials presented before the court at the time of considering the bail application did not reveal prima facie that the accused persons released on bail are involved in a terrorist act, as defined under Section 15 of the UA(P) Act. 38. Learned trial Judge has observed that the case diary produced by NIA in six volumes consist of nearly 2500 pages and on scanning through the materials, the court below found that the persons to wh....
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....n a reappraisal of the entire materials, we agree with the learned trial Judge that the materials produced before the court at that point of time are insufficient to hold prima facie that the accused persons have committed a terrorist act. We shall not be understood as declaring that the accused persons have not committed any of the offences alleged against them. We make it clear that we are only endorsing the trial court's view that the materials placed before it for considering the bail plea are insufficient to hold prima facie that those released accused were involved in any terrorist act. We make it further clear that none of the observations in this judgment will preclude the investigating agency from collecting any evidence to establish the involvement of the accused in any of the offences alleged. Likewise, the investigating agency is free to take all steps to convince the trial court that the accused are liable for all the offences alleged in the final report. Moreover, we caution the court below not to be influenced by any of the observations in this judgment at the time of trial. 41. On a perusal of the operative portion of the bail order, we find that the trial co....