Laxman Chandra J Parai V. Union Of India Thru. Directorate Of Revenue Intelligence (Customs) Lko.

/11304/2024

AI Insights

The case revolves around a bail application by Laxman Chandra J. Parai, who was accused under Section 135 of the Customs Act, 1962, for allegedly possessing gold and cash of foreign origin without proper declaration. The Directorate of Revenue Intelligence (DRI) had intercepted two co-accused, Lalmohan Panja and Harekrishna Parai, with the contraband and subsequently searched properties linked to the applicant, leading to further seizures. The applicant argued that he was a legitimate businessman and that the gold was not of foreign origin, a claim supported by his business documentation. The DRI opposed the bail, citing the seriousness of the charges and the evidence against the applicant. However, the court found that the applicant's business activities and the documentation provided were sufficient to grant bail, emphasizing the need to balance personal liberty with the severity of the alleged offense.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 800071 (HC-LUCKNOW)
• Appeal Type: Others
• Pronouncement Date: 08-11-2024
• Assessment Year: misc
• Laws Referred To: Customs Act, 1962, Cr.P.C., Bureau of Indian Standards Act, 2016, Indian Evidence Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: DIGVIJAY DUBEY
• Assessee Lawyers: ATUL VERMA; AKHILENDRA SINGH; MOHD RIZVI; VINOD YADAV
• Keywords: Anticipatory bail; Bail application; Customs Act; Foreign origin; Gold smuggling; Judicial Custody; Regular bail
• Section: 123; 135; 438; 439

Judgement Text

"- 1 - Neutral Citation No. - 2024:AHC-LKO:73985 Case :- CRIMINAL MISC. BAIL APPLICATION No. - 11304 of 2024 Applicant :- Laxman Chandra J Parai @ Laxman Chandra Parai (As Per Complaint) Opposite Party :- Union Of India Thru. Directorate Of Revenue Intelligence (Customs) Lko. Counsel for Applicant :- Atul Verma,Akhilendra Pratap Singh,Mohd Agha Haider Rizvi,Vinod Kumar Yadav Counsel for Opposite Party :- Digvijay Nath Dubey * * * * * Hon'ble Jaspreet Singh,J. 1. Heard Shri Atul Verma, learned counsel for the applicant and Shri Digvijay Nath Dubey, learned counsel for the respondent. 2. This is a regular bail application filed by the applicant who has been arraigned in a Complaint Case/DRI Case No.6/2024 under Section 135 of the Customs Act, 1962, Police Station DRI, District Lucknow. 3. The applicant had earlier filed an application seeking anticipatory bail under Section 438 Cr.P.C., bearing No.793 of 2024 (Laxman Chandra J. Parai v. Union of India) which came to be rejected by this Court by means of order dated 14.05.2024. It is in furtherance thereof that the applicant surrendered before the Court concerned and he is in judicial custody since 29.06.2024. 4. The facts as borne out from the record reveals that Directorate of Revenue Intelligence (hereinafter referred to 'DRI') received specific tip and information and acting upon the same, it intercepted two persons namely Lalmohan Panja and Harekrishna Parai, two co-accused, on 20.02.2024 at around 09:20 PM from the Second AC Coach bearing No.A1 of Pushpak Express (Train No.12533) from Charbagh Railway Station, Lucknow and their baggage was searched. From their three Trolley Bags, 558.900 Grams of Gold allegedly of foreign origin valued at - 2 - Rs.3,29,25,000/- and cash in Indian Currency worth Rs.3.28/- Crores is said to have been recovered. It was informed by the two co-accused that they were travelling to Mumbai to deliver the above recovered gold and ornaments and cash currency to its owners namely Laxman Chandra J. Parai (the applicant) and his brother namely Ramkrishna Jaladhar Parai (another co-accused). 5. Upon further questioning and as per information revealed by the two co-accused follow up search was conducted in the office premises, of the applicant and his brother co-accused Ramkrishna Jaladhar Parai, situate in a Flat, in Chowk area of Lucknow from where additional 7,700 grams of gold jewellery is said to have been recovered and valued at Rs.3,69,60,000/-. 6. The detained two co-accused namely Lalmohan Panja and Harekrishna Parai also revealed that another locker was kept in the residence of another co-accused Sumit Rastogi. The premises of Sumit Rastogi was also searched and a locker was recovered from the said premises. The keys to the said locker were available with the two detained co-accused persons who were being questioned and upon opening of the said locker 20,500 grams of gold jewellery was found in the said locker valued at Rs.12,42,62,400/-. 7. Three test samples marked as S1, S2 and S3 were drawn from the seized gold jewellery as well as 41.9 grams of gold pieces and were sent to the Director Central Revenue Control Laboratory at New Delhi and its report indicated that the first sample marked as S1 was composed of 98.42% of gold (by weight), the second sample S2 was an alloy containing - 3 - gold, silver and copper with primary gold content of 74.38% (by weight) and the third sample S3 indicated that it was an alloy of gold, silver and copper with gold content of 75.15% (by weight). 8. Upon the aforesaid information and recovery of the articles and cash from the two detained co-accused namely Lalmohan Panja and Harekrishna Parai they were apprehended and were sent to jail. 9. The complaint under Section 135 of the Custom Act, 1962 was filed against (i) Lalmohan Panja and (ii) Harekrishna Parai (these two co- accused were apprehended at the railway station with the seized cash and gold jewellery, (iii) Sumit Rastogi, from whose residence a locker was found of which the combination and key were with the above mentioned two detained co-accused who were apprehended with the jewellery and cash, (iv) the applicant and (v) his brother Ramkrishna Jaladhar Parai and (vi) another co-accused Abhijeet Manna. 10. The record further reveals that Sumit Rastogi was enlarged on bail by this Court by means of the order dated 03.04.2024 passed in Criminal Misc. Bail Application No.3594/2024. 11. Thereafter, two regular bail applications of the apprehended co- accused namely Lalmohan Panja and Harekrishna Parai were filed and two anticipatory bail applications were filed by the present applicant and his brother Ramkrishna Jaladhar Parai. All four came to be rejected by this Court by means of the order dated 14.05.2024 passed on four above mentioned separate bail applications. 12. In the aforesaid backdrop the present applicant Laxman Chandra J. - 4 - Parai has moved the instant regular bail under Section 439 Cr.P.C. 13. Shri Atul Verma, learned counsel for the applicant has urged that the applicant is a respected businessman trading in gold and jewellery. The applicant is a proprietor of firm named and styled as M/s. R.L. Jewels which was formally incorporated in the year 2019, even though the applicant has been an income tax payee since last several years. The firm of the applicant namely M/s. R.L. Jewels is duly registered under the Goods, Service Tax (GST) and it also registered with the Ministry as a Micro, Small and Medium Enterprise (MSME). 14. The submission of the learned counsel for the applicant is that the applicant procures gold and thereafter the same is used for making jewellery and ornaments which is sold across the country to its customers. 15. It is urged that in the regular course of business, the applicant maintains proper books of accounts which inter-alia includes stock register, ledgers which reflects the procurement and sale of gold, GST returns which includes the sale of jewellery made from gold. The sale proceeds received from the customers is deposited in the bank account of the firm maintained with the ICICI Bank Limited, situate in Ostwal, D. Darshana Building, Near Jain Mandir, Thane (Maharashtra). 16. It is further urged that the applicant has paid GST to the concerned Department and the relevant statements of bank account, the GST returns, income-tax returns, registration of firm of the applicant with the GST Department and with MSME have been annexed with the bail application to clearly demonstrate that the applicant is a bonafide businessman having - 5 - a respectable position in the market and the applicant has been paying his taxes and he has been falsely implicated in the instant case. 17. The thrust of the submissions of Shri Verma is that the complaint has been filed against the applicant under Section 135 of the Customs Act. It is urged that in order to attract the aforesaid offence in terms of Section 135 of the Customs Act there must be prima-facie indication that the gold jewellery which is said to have been confiscated and seized by the DRI is made from gold of foreign origin. In this regard, it is urged that except for the statement of the two co-accused namely Lalmohan Panja and Harekrishna Parai, there is no material brought on record by the DRI to indicate that the gold jewellery was made from gold of foreign origin. Even a small quantity of gold in form of pieces also do not have any marking to indicate that the gold pieces were of foreign origin. 18. It is further submitted that in absence of any clear prima-facie material to indicate that gold is of foreign origin apparently the provisions of Section 135 of the Customs Act is not attracted. The statement given by the two co-accused Lalmohan Panja and Harekrishna Parai cannot be used against the applicant for charging him with the offence under Section 135 of the Customs Act. 19. Shri Verma has further urged that the said gold jewellery which has been seized and recovered from the two co-accused were not in the shape of gold pieces or bars nor the same has been recovered and seized from any airport or port which could give rise of any speculation that the said gold was being smuggled in the country. On the contrary the material brought on record suggests clearly that the applicant is a bonafide businessman and has - 6 - ample resources to justify the quantity of gold jewellery as well as gold pieces and the necessary corresponding transactions including payment of GST returns filed by the applicant also corroborates the level of business turnover being done by the applicant. 20. It is further submitted that the allegations in the complaint and in the counter affidavit filed in the instant bail application by the DRI, it does not dispute the genuineness of the bank account statement, GST returns and income-tax returns including the documents relating to the stock register maintained by the applicant and it all points to the business turnover of the applicant and his firm and as such the business dealing of the applicant in respect of gold and jewellery is properly documented and accounted for. 21. However, insofar as the cash component is concerned, the same has been derived from the sale of gold jewellery and the same is claimed by the applicant and his brother, the co-accused Ramkrishna Jaladhar Parai as their own. The cash amount had it not been seized, it would have been deposited by the applicant in the firm account upon which necessary taxes would have been paid but nevertheless it will not amount to any smuggling or evasion of duty to invoke the provisions under the Customs Act. 22. Even at best, if it is considered to be a case of evasion of custom duty (though not conceded) the applicant can only be subjected to penalties. The gold jewellery as recovered may not have had any BIS marking even then it could be a mere violation of the provisions of Bureau of Indian Standards Act, 2016 against which some penalty can be imposed upon the applicant but nonetheless a case for keeping the applicant in custody is not made out. - 7 - 23. It is further submitted that the applicant has been in jail since 29.06.2024 and the complaint has already been filed on the basis of material available with the Department and no interest has been shown by the DRI that the custody of the applicant is required for any further investigation or interrogation. The Department already had made a search of the residence and the office premises of the applicant maintained in Thane, Maharashtra and at Lucknow and it has already seized all articles which the Department thought was incriminating, hence, there is no apprehension that the applicant will be at flight risk or would tamper with any evidence or influence any witness. In such circumstances, the applicant, who otherwise has already undergone more than 4 months in jail where the maximum sentence in terms of Section 135 of the Customs Act is upto 7 years and triable by the Magistrate, hence, in the aforesaid circumstances, the bail application deserves to be allowed. 24. Shri Digvijay Nath Dubey, learned counsel for the DRI has vehemently opposed the bail application. The submission is that huge quantity of gold and cash was recovered from the two co-accused namely Lalmohan Panja and Harekrishna Parai, who are said to be the employees of the applicant and his brother Ramkrishna Jaladhar Parai. 25. It is further submitted that the documents which have been annexed with the bail application cannot be taken to be the gospel truth regarding the bonafides of the applicant. It is urged that what is important is the fact that the gold jewellery, gold pieces and cash which have been recovered has been accepted by the applicant to be that of the applicant and his brother. - 8 - 26. It is further submitted that the statements of the two co-accused which has been recorded is a valuable piece of evidence. The statements of the employees of the applicant clearly indicates that the gold jewellery has been made from the gold of foreign origin. It is submitted that the two co- accused namely Lalmohan Panja and Harekrishna Parai, they worked for the applicant and his brother. They used to smuggle gold in the country from Nepal and the same is then melted to make gold jewellery and later sold to the customers. This clearly depicts bringing gold of foreign origin in the country and clearly a case under Section 135 of the Customs Act is made out. 27. Shri Dubey has further urged that in terms of Section 135, the burden is on the applicant to disprove that the gold or the ornament with which it has been made is not of foreign origin. It is further submitted that during the investigation and recording of the statements of the co-accused and the applicant it revealed that the applicant, his brother and the another co- accused namely Lalmohan Panja and Harekrishna Parai, Sumit Kumar Rastogi and Abhijeet Manna were in constant touch with each other on mobile phone as referred from the call data and record of the phone calls of the applicants and other co-accused. Apart from being in touch with each other they even shared the pictures of the gold items so much so that even immediately prior to the apprehending of the two co-accused, the applicant and his brother were in touch with the detained co-accused including Sumit Kumar Rastogi and there is sufficient material to implicate the applicant and the co-accused in terms of Section 135 of the Customs Act. 28. It is further urged that the statements of two detained co-accused as - 9 - well as the applicant is not hit by Section 25 of the Indian Evidence Act as it is now well settled that the statement of the accused before the custom officer (who is not a police officer) can be used against the applicant. 29. In light of the aforesaid, the statement of the co-accused and the confession recorded therein that the gold jewellery was made of gold from foreign origin and looking into the quantum of the cash recovered and the gold jewellery, the complicity of the applicant is duly established. Hence, the bail application deserves to be rejected. 30. The parties have exchanged pleadings. The applicant has filed the bail application along with documents to which the Department submitted its counter affidavit dated 24.10.2024. The applicant then filed his rejoinder affidavit on 08.11.2024. In response thereto, the DRI also filed its supplementary counter affidavit on 08.11.2024 itself. 31. The Court has heard learned counsel for the parties at length and have also perused the material on record. 32. The complaint has been filed before the Chief Judicial Magistrate (Economic Wing), under Section 135 of the Customs Act, 1962. 33. From a perusal of the aforesaid section, it is apparent that a person can be punished for the limited offence if the ingredient as set out in the said section is made out. The maximum sentence which is prescribed in the aforesaid provisions is upto 7 years. The said section also indicates that only in terms of special circumstances, as mentioned in the said section, the sentence can be upto 7 years. 34. Section 123 of the Act mentions regarding the burden of proof in - 10 - certain cases. The said section enumerates that where there is a reasonable belief that any goods have been smuggled then the burden to prove that goods have not been smuggled is on the person from whose possession the incriminating articles have been recovered and seized. This section is applicable to gold and other class of goods which may be notified by the Central Government. 35. Taking note of the respective submissions of the parties and the provisions as referred hereinabove, it reveals that the applicant is dealing with sale of gold jewellery through his firm M/s. R.L. Jewels. The said firm is a proprietorship and is duly registered with the GST and MSME. The documents filed by the applicant including his bank statement, income tax returns, GST returns, stock register and other business related documents, prima-facie, indicate that the applicant is a businessman dealing with gold and gold jewellery. The statement given by the applicant also reflects that two persons who were apprehended namely Lalmohan Panja and Harekrishna Parai were the employees of the applicant and his brother. They too gave the statement that the jewellery and the cash belonged to the applicant and his brother. It is also reflected from the records that the flat situate in chowk Lucknow was rented by the brother of the applicant and his firm and was also utilized by the applicant for his business purposes including keeping the gold ornaments. 36. The record further indicates that despite filing various affidavits by the applicant either in support of the bail application or in rejoinder affidavit to the counter affidavit filed by the DRI, yet there is no plausible explanation insofar as cash recovered from the co-accused is concerned, - 11 - except that the said cash belonged to the applicant and his brother as it was generated from the sale of jewellery. 37. Prima-facie record reflects that the quantum of business generated by the applicant through his firm can give rise to the turnover as suggested and the applicant may have the necessary resources to justify the availability of the quantity of gold and jewellery. 38. It is also not the case of the DRI that the aforesaid gold/jewellery/cash was recovered from the airport or from a railway station near a border town from where the gold of foreign origin could be smuggled. Except for the incriminating statement made by the two co- accused namely Lalmohan Panja and Harekrishna Parai, there is nothing to indicate with clarity that the gold or gold jewellery which has been recovered and seized had any foreign origin. In such circumstances, the issue of reverse burden at this stage, where the Court is considering the bail, is not relevant in this given case rather it would be a matter to be considered by the trial Court during trial. Apart from Section 135 of the Customs Act, the applicant has not been charged with any other sections either under the Customs Act or any other Act for having committed an offence. 39. It could not be disputed at this stage by the DRI that the documents which have been submitted by the applicant are not genuine. The applicant has his own residence, his firm is duly registered and its business relates to dealing with gold jewellery. Bank statements, GST returns, Income-tax Returns, all reflect that the applicant is not at flight risk. The family of the applicant is also residing in Thane, Maharashtra and it shows that the - 12 - applicant has roots in the society. 40. It is also not disputed that the applicant does not have any other criminal history except for the case at hand. The applicant has been in jail since more than 4 months and apparently the DRI has not demonstrated any reason or purpose for which the custody of the applicant is required any more. It is also not disputed that the maximum sentence as prescribed under Section 135 of the Customs Act is upto 7 years and is triable by Magistrate and the complaint has already been filed. 41. It is also informed by the learned counsel for the applicant that the co-accused, namely, Ramkrishna Jaladhar Parai had already been enlarged on bail by this Court by means of its order dated 16.10.2024 passed in Criminal Misc. Bail Application No.7983 of 2024 Ramkrishna Jaladhar Parai v. Union of India and the case of the present applicant is most identical to the case co-accused Ramkrishna Jaladhar Parai. 42. Considering the submissions and material on record also considering the nature of allegations and accusation against the applicant, the severity of the punishment if convicted including the fact that the applicant is not at flight risk nor it has been apprehended by the DRI that the applicant is in a position to tamper with evidence or influence any witness and that the charge under Section 135 of the Customs Act is yet to be established in trial also noticing the period of incarceration as well as the fact that the personal liberty of the applicant is a precious fundamental right which has to be balanced in the context with the punishment which may finally be awarded upon conclusion of trial, hence, at this stage, without expressing any opinion on the merits of the case, this Court is of the view that the applicant - 13 - is entitled to be released on bail. 43. Let the applicant Laxman Chandra J. Parai involved in Complaint Case/DRI Case No.6/2024 under Section 135 of the Customs Act, 1962, Police Station DRI, District Lucknow be released on bail on his furnishing a personal bond with two reliable sureties each in the like amount to the satisfaction of the court concerned. 44. At the time of executing required sureties the following conditions shall be imposed in the interest of justice. (i) The applicant shall file an undertaking to the effect that he shall not seek any adjournment on the dates fixed for evidence when the witnesses are present in court. In case of default of this condition, it shall be open for the trial court to treat it as abuse of liberty of bail and pass orders in accordance with law. (ii) The applicant shall remain present before the trial court on each date fixed, either personally or through his counsel. In case of his absence, without sufficient cause, the trial court may proceed against him under Section 229-A of the Indian Penal Code. (iii) The applicant will not leave the country without the written leave of the trial Court. (iv) In case, the applicant misuses the liberty of bail during trial and in order to secure his presence proclamation under Section 82 Cr.P.C. is issued and the applicant fails to appear before the court on the date fixed in such proclamation, then, the trial court shall initiate proceedings against him, in accordance with law, under Section 174-A of the Indian Penal - 14 - Code. (v) The applicant shall remain present, in person, before the trial court on the dates fixed for (i) opening of the case, (ii) framing of charge and (iii) recording of statement under Section 313 Cr.P.C. If in the opinion of the trial court, absence of the applicant is deliberate or without sufficient cause, then it shall be open for the trial court to treat such default as abuse of liberty of bail and proceed against him in accordance with law. (vi) The applicant shall neither influence any witness nor tamper with any evidence after his release. Order Date :- 08.11.2024 Rakesh/- Digitally signed by :- RAKESH PRAJAPAT High Court of Judicature at Allahabad, Lucknow Bench "