TaxTMI 
TaxTMI 
TaxTMI 
2008 (10) TMI 1
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...., they shall not be arrested without ten days prior notice. Facts 3. It is the case of the appellant (Union of India) that Director of Revenue Intelligence (`DRI' for short) was investigating the matter in respect of export of readymade garments by M/s B.A. International valued at Rs.4.75 crores through various ports during December, 2000 to 3 March, 2003. According to the allegation of the appellant, on the basis of information received from the Income Tax Department on September 15, 2006, investigation was conducted and search operation was carried out at two office premises of M/s B.A. International which revealed that the so-called suppliers of raw material i.e. fabrics and job workers of garments, were bogus and non-existent entities and at the declared address, no such firms or business entities were found. The accused thereby fraudulently availed drawback amounting to Rs.75 lakhs approximately. 4. M/s B.A. International is a partnership firm and is controlled by Padam Narain Agarwal-respondent No. 1. Asha Rani Aggarwal, respondent No. 2 is the wife of Padam Narain Aggarwal. Other partners of the said firm are family members of Padam Narain Aggarwal. The overseas ....
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....he summons issued to them and in case the customs authorities found any non bailable offence against the accused petitioners, they shall not be arrested without ten days prior notice to them." (emphasis supplied) 10. The said order is challenged by the Union of India in this Court. Earlier orders 11. On April 23, 2007, the matter was placed for admission hearing. Notice was issued 7 by this Court and respondents were granted time to file affidavit in reply. Affidavits were, thereafter, filed. Considering the nature of directions issued by the High Court, the Registry was asked to place the matter for final hearing and that is how the matter has been placed before us. Submissions of counsel 12. We have heard learned counsel for the parties. 13. The learned Addl. Solicitor General, appearing for Union of India contended that the order passed by the High Court is illegal and erroneous. The counsel submitted that once the High Court held that the respondents were merely summoned under Section 108 of the Act to give statements in the inquiry and anticipatory bail applications were premature, no further direction could have been issued. The High Court rightly direc....
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..... Chapters IVA to IVC relate to detection of illegally imported goods, prevention of disposal thereof, etc. 19. Chapter XIII (Sections 100-110) is an important Chapter and deals with search, seizure and arrest. Sections 100-03 authorise Custom Officers to search suspected persons. 1 Section 104 enables Custom Officers to arrest a person. Similarly, power to search premises and conveyances is found in Sections 105 to 106A. Sections 107-09 empower Custom Officers to examine persons and summon them to give evidence and produce documents. Seizure of goods, documents and things can be effected under Section 110. 20. Chapter XIV provides for confiscation of goods and conveyances as also imposition of penalties. Chapter XVI (Sections 132-140A) deals with offences and prosecutions. Power to arrest 21. Having noticed the relevant provisions of the Act, let us now consider ambit and scope of power of arrest. 22. The term "arrest" has neither been defined in the Code of Criminal Procedure, 1973 nor in the Indian Penal Code, 1860 nor in any other enactment dealing with offences. The word "arrest" is derived from the French word 1 "arrater" meaning "to stop or stay". It sign....
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....provides for release of such person on bail. Anticipatory bail 26. Section 438 of the Code makes special provision for granting `anticipatory bail' which was introduced in the present Code of 1973. The expression (`anticipatory bail') has not been defined in the Code. But as observed in Balchand Jain v. State of M.P., (1976) 4 SCC 572, anticipatory bail means a bail in anticipation of arrest. The expression `anticipatory bail' is a misnomer inasmuch as it is not as if bail presently granted in anticipation of arrest. Where a competent court grants `anticipatory bail', it makes an order 1 that in the event of arrest, a person shall be released on bail. There is no question of release on bail unless a person is arrested and, therefore, it is only on arrest that the order granting anticipatory bail becomes operative. 27. It was also observed that the power of granting `anticipatory bail' is extraordinary in character and only in exceptional cases where it appears that a person is falsely implicated or a frivolous case is launched against him or "there are reasonable grounds for holding that a person accused of an offence is not likely to abscond, or otherwise misuse his li....
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....discretion, direct that in the event of his arrest, he shall be released on bail. (2) A Magistrate taking cognizance of an offence against that person shall, while taking steps Under Section 204(1), either issue summons or a bailable warrant as indicated in the direction of the Court under Sub-section (1). 1 (3) if any person in respect of whom such a direction is made is arrested without warrant by an officer in charge of a police station on an accusation of having committed that; offence, and is prepared either at the time of arrest or at any time while in the custody of such officer to give bail, such person shall be released on bail. We considered carefully the question of laying down in the statute certain conditions under which alone anticipatory bail could be granted. But we found that it may not be practicable to exhaustively enumerate those conditions; and moreover, the laying down of such conditions may be construed as prejudging (partially at any rate) the whole case. Hence we would leave it to the discretion, of the; court and prefer not to fetter such discretion in the statutory provision itself. Superior Courts will, undoubtedly, exercise their discretion ....
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....Gurbaksh Singh Sibbia & Ors. v. State of Punjab, (1980) 2 SCC 565, the Constitution Bench of this Court was called upon to consider correctness or otherwise of principles laid down by the Full Bench of High Court of Punjab & Haryana in Gurbaksh Singh Sibbia v. State of Punjab, AIR 1978 P & H 1 : 1978 Crl LJ 20 (FB). The Full Bench of the High Court summarized the law relating to anticipatory bail as reflected in Section 438 of the Code and laid down certain principles as to when discretionary power to grant anticipatory bail may be exercised by a Court. 35. This Court partly disagreeing with the judgment of the High Court held that the Legislature conferred a wide discretion on the High Court and the Court of Session to grant anticipatory bail since it felt, firstly, that it would be difficult to enumerate the 2 conditions under which anticipatory bail should or should not be granted and secondly, because the intention was to allow the higher courts in the echelon a somewhat free hand in the grant of relief in the nature of anticipatory bail. 36. The Court stated; "Generalizations on matters which rest on discretion and the attempt to discover formulae of universal appli....
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....from the fact that the question is inherently of a kind which calls for the use of discretion from case to case, the legislature has, in terms express, relegated the decision of that question to the discretion of the court, by providing that it may grant bail "if it thinks fit". The concern of the Courts generally is to preserve their discretion without meaning to abuse it. It will be strange if we exhibit concern to stultify the discretion conferred upon the Courts by law". (emphasis supplied) 39. We may also refer to at this stage `Malimath Committee on Reforms of Criminal Justice System'. Considering the exercise of power by Courts under Section 438 and grant of anticipatory bail in favour of applicants, the Committee observed that the provision as to anticipatory bail has often been `misused by rich and influential people'. The Committee, 2 however, opined to retain the provision subject to two conditions; (i) Public Prosecutor should be heard by the court before granting an application for anticipatory bail; and (ii) Petition for anticipatory bail should be heard only by the court of competent jurisdiction. 40. It may be stated that Section 438 has been amended b....
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....ely to be arrested for commission of a non-bailable offence, the Court has no power to grant anticipatory bail. 44. This Court, however, held that the High Court was wholly right so far as proposition (2) was concerned. The High Court in proposition (2) said; "Neither Section 438 nor any other provision of the Code authorizes the grant of blanket anticipatory bail for offences not yet committed or with 2 regard to accusations not so far levelled". 45. Agreeing with the said proposition, this Court stated; "We agree that a 'blanket order' of anticipatory bail should not generally be passed. This flows from the very language of the section which, as discussed above, requires the applicant to show that he has "reason to believe" that he may be arrested. A belief can be said to be founded on reasonable grounds only if there is something tangible to go by on the basis of which it can be said that the applicant's apprehension that he may be arrested is genuine. That is why, normally, a direction should not issue under Section 438(1) to the effect that the applicant shall be released on bail "whenever arrested for whichever offence whatsoever." That is what is meant by a 'bl....
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....power should not be exercised in a vacuum". (emphasis supplied) 48. Gurbaksh Singh, thus clearly laid down that no blanket order of bail can be passed by a Court while exercising power under Section 438 of the Code. 49. In Adri Dharan Das v. State of West Bengal, (2005) 4 SCC 303, referring to Gurbaksh Singh, this Court observed that normally, no direction should be issued to the effect that the applicant should be released on bail "whenever arrested for whichever offence whatsoever". Such order should not be passed as it would serve as a blanket to cover or protect any and every kind allegedly unlawful activity. An order under Section 438 is a device to secure the individual's liberty; it is neither a passport to the commission of crimes nor a shield against any and all kinds of accusations likely or unlikely. 50. The Court proceeded to state; "Ordinarily, arrest is a part of the process of investigation intended to secure several purposes. The accused may have to be questioned in detail regarding various facets of motive, preparation, commission and aftermath of the crime and the connection of other persons, if any, in the crime. There may be circumstances in which the ac....
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....iderations that we have to decide correctness or otherwise of the directions issued by a single Judge of the High Court. `Blanket' order of bail may amount to or result in an invitation to commit an offence or a passport to carry on criminal activities or to afford a shield against any and all types of illegal operations, which, in our judgment, can never be allowed in a society governed by Rule of Law. Statements under Section 108, Customs Act : Evidentiary value 54. As already noted in the earlier part of the judgment, Sections 107-09 confer power on Custom Officers to examine persons, to summon them to give evidence and to produce documents. 55. Section 108 which is a material provision, reads thus; Power to summon persons to give evidence and produce documents.— (1) Any gazetted officer of customs duly empowered by the Central Government in this behalf, shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making under this Act. (2) A summons to produce documents or other things may be for the production of certain specified documents or ....
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....ld be used against him. The said requirement is included in the provision for the purpose of enabling the gazetted officer to elicit the truth from the person interrogated. There is no involvement of the magistrate at that stage. The entire idea behind the provision is that the gazetted officer questioning the person must gather all the truth concerning the episode. If the statement so extracted is untrue its utility for the officer gets lost". (emphasis supplied) 59. It is thus clear that statements recorded under Section 108 of the Act are distinct and different from statements recorded by Police Officers during the course of investigation under the Code. Imposition of condition before effecting arrest 60. The counsel for the Union of India submitted that in spite of settled law on the point, the directions issued by the High Court have made the statutory provisions ineffective, nugatory and meaningless. Even if on the basis of statements of the respondents, the Custom Authorities are satisfied that the respondents had committed non-bailable offence and in exercise of statutory power, they could be arrested, the directions of the High Court will come in the way of the Authori....