APRIL 07, 2021

By Vijay Kumar

WITH DRI being in the news with its existential problems after the Canon judgement - 2021-TIOL-123-SC-CUS-LB, I bring to you this week the story of how a DRI chief was transferred, which would throw some light on the initial years of DRI and how the department worked - just fifty years ago.

Old timers will remember the name of Haji Mastan, the notorious smuggler who ruled the underworld in the sixties and the legendary Customs officer SK Srivastava who gave the smugglers a run for their money and gold. This is the story of Srivastava when he was unceremoniously removed from the post of Director of Revenue Intelligence. Srivastava joined the Imperial Customs Service on 7th September 1948.

On 12th August 1959 by an executive resolution of the Government of India, the Indian Customs Service Class I and the Central Excise Service Class I were integrated with effect from 15th August 1959.

On 30-8-1967 the President was pleased to order that Srivastava, then posted as Collector of Central Excise, Allahabad be transferred and posted as Director of Revenue Intelligence, New Delhi. He assumed charge of the post of Director of Revenue Intelligence on 19-9-1967.

In April 1970 a telegram was received pointing out that Srivastava with his family was staying with a person who was previously a notorious smuggler having been convicted as such. It was also alleged therein that the petitioner has been showing favour to another well-known smuggler. When he was asked to give his version about this telegram, he admitted that he with his family stayed with the person who was formerly a smuggler and an ex-convict but defended his action by stating that the said person was no longer pursuing such illegal activities and on the other hand the petitioner obtained information from him about other smugglers. He also denied showing favour to the other well-known smuggler.

The Government attached great importance to the need for the person occupying the sensitive office of the Director of Revenue Intelligence to so conduct himself as to set an example of upright behaviour and rectitude. The Government carefully considered the explanation offered by the petitioner but felt that he had committed a grave impropriety in this particular matter. In the interest of maintaining decorum in administration and having regard to the sensitive nature of the duties performed by the Director of Revenue Intelligence, the Government decided to transfer Srivastava from the post of Director of Revenue Intelligence on 25th May 1970 with the concurrence of the Minister of State in the Ministry of Finance and of the Prime Minister who was in-charge of Ministry of Home Affairs at that time.

Srivastava, however, refused to join his posting at Hyderabad and filed a writ petition in the Delhi High Court challenging his transfer from the post of Director of Revenue Intelligence to the post of Collector as being illegal and unconstitutional.

The Delhi High Court observed,

Initially the officers of the Collectorate of Customs and Excise working under the Ministry of Finance, Department of Revenue, used to do all the work relating to customs and excise. In 1939, the work of inspection in the Departments of Customs and Central Excise which was till then performed by the departments themselves was carved out and given to a separate Directorate of Inspection (Customs and Central Excise) as a part of the office of the Central Board of Revenue which was formed by an Act of 1924 and which was split later by an Act of 1963 into two Boards, namely:- Board of Direct Taxes under which functions the Department of Income-tax and The Central Board of Excise and Customs under which functioned the Collectorates of Customs and Central Excise, Directorate of Inspection and Directorate of Revenue Intelligence.

It was in 1957 that the intelligence work till then performed by the Central Revenue Intelligence Bureau functioning as a unit in the Directorate of Inspection, was constituted as a third unit in the Department of Revenue, Ministry of Finance styled as Directorate of Revenue Intelligence.

As the work of Directorates of Inspection and Revenue Intelligence has been carved out from the work originally performed by the Collectorates of Customs and Central Excise and as no separate personnel was recruited to man the posts in these two Directorates, the members of the Indian Customs and Central Excise Service Class I have been manning those posts. There have been therefore, numerous transfers of officers of the Indian Customs and Central Excise Service Class I from their posts in the Collectorates to the subsequently created posts in the Directorates. Equally frequently these officers have been transferred back to the posts in the Collectorates. The important fact to be noted is that only one set of personnel originally recruited for the Customs and Central Excise Collectorates has been used to fill the posts not only in the Collectorates but also in the Directorates. The reason is obvious. The Central Board of Excise and Customs in 1963 and prior to that the Central Board of Revenue functioning as a part of the Department of Revenue, Ministry of Finance of the Government of India administered and controlled the work of the Collectorates of Customs and Central Excise as well as of the Directorates of Inspection and Revenue Intelligence. These three units form one whole working under the Board and the Ministry.

The Government had at one time (in 1954) intended to merge not only the Customs and Central Excise but also the Income-tax and the other technical posts into one Service called Indian Revenue Service. This total merger was not achieved. In 1959 only the Customs and Central Excise were merged into one Service. The effect was that from 1959 onwards the Central Board of Revenue and the Indian Revenue Service functioning under the Ministry of Finance (Department of Revenue) consisted of three branches, namely:- A. Customs/Central Excise Branch (including Narcotics); B. Income Tax Branch; and C. Central Revenues Chemical Service, Class 1.

Just as the Central Government depended on the officers of the different state cadre of the Indian Administrative Service for filling the posts in the Central Government, similarly the Ministry of Finance, Department of Revenue, depended on the officers of the Indian Customs and Central Excise Service Class I as also the subordinate officers of the Customs and Central Excise to man the posts in the Directorates of Inspection and Revenue Intelligence.

Even the Directorate of Revenue Intelligence was created only by executive action and not by any statute or statutory rules. This was why orders of 1957 could be modified by the orders of 1960 and 1965 administratively. Just as there were no rules governing the appointments to the posts in the Collectorates of Customs and Central Excise, there were no rules governing the appointments in the Directorate of Revenue Intelligence. This was why the transfers from the Collectorates to the Directorate and vice versa were freely made without any question of acquisition of lien by any officer on any post in the Directorate, arising.

This may perhaps explain why DRI officers need not be empowered to act as Customs Officers under Section 6 of the Customs Act.

Srivastava in his petition had submitted:

That in the month of July 1970, he was investigating into smuggling rackets of prime importance at Bombay - rackets which had caused a lot of damage to national economy. He had recorded or caused to be recorded, during the said investigations, statements of important members of the said smuggling rackets, disclosing startling facts as to the new modes of smuggling as also the sources in India which were privy to the said operations of and directly or indirectly assisting the said rackets. These sources, unfortunately, included some of those who were directly and/or indirectly entrusted with anti-smuggling and preventive operations of this young Republic.

These investigations had been going on for quite some time and had reached a new tempo by July, 1970. That on the 21st July, 1970, he was attending the Bombay High Court, to assist the Counsel engaged by the Government, in connection with a bail application of one Mastan, a notorious alleged smuggler from Bombay, operating smuggling rackets in various parts of the country. (see in those days, the DRI Chief attended High Court to brief the counsel) After the hearing of the said bail application of said Mastan was adjourned on that day, i.e. the 21st July, 1970, one of the associates of Mastan consulted the said Mastan in the open court, within the hearing of Srivastava and others that he (Mastan) did not need to worry as orders for Srivastava's transfer from the post of the Director of Revenue Intelligence were going to be issued very soon.

That on the 24th of July 1970, while Srivastava was in Bombay, he was informed by sources believed to be close to the smugglers that the smugglers had confidently and widely pronounced in Bombay that orders removing him from the post of the Director, Revenue Intelligence, had been passed.

That as the said news was bound to break the morale of sources, close to the smugglers, who were assisting Srivastava in collection of intelligence and evidence against the said rackets, he came to Delhi on the 25th July 1970, and immediately called upon the officers in his Directorate and contacted some of his colleagues in the Central Board of Excise and Customs to verify the correctness and truth of the rumours. To his astonishment, however, each one of the said persons expressed complete ignorance about any knowledge as to any such orders having been passed or being contemplated.

He, thereupon, on the same day. wrote a top-secret note and saw the Director-General, Revenue Intelligence and investigation with the said note, apprising him of the said rumours. The said Director-General carefully went through the said note and heard Srivastava but did not state that any such orders were contemplated nor that any such orders had been passed.

That at 10 AM on the 27th July, 1970, Srivastava was summoned to the office of the Director-General, Revenue Intelligence and Investigation, in the North Block of the Central Secretariat of the Government of India, New Delhi, where he was served with order No. 110170, dated 27th of July, 1970, at about 10.10 A.M.

By the said order, Srivastava was informed that the President had been pleased to order his transfer with immediate effect, and that he had been posted as Collector of Customs, Calcutta, vice Shri A. K. Bandopadhyaya. The said order directed that Shri M. G. Wagh, the afore-mentioned, Director General, (Revenue Intelligence and Investigation) would hold charge of the said post of Director of Revenue Intelligence until further orders. The said order would go to show that it was made and communicated with unusual haste, without even making alternative arrangements for appointment to the said post of Director Revenue Intelligence and without assigning a posting to Shri Bandopadhyaya and that the whole order is and was shrouded in mystery.

That after the receipt of the said impugned order dated 27th of July 1970, Srivastava along with Shri M. G. Wagh, the Director-General, called on Shri D. P. Anand, Chairman of the Board, Respondent No. 2 to the petition, and explained to him the risks involved in handing over charge merely by signing a charge report, without going through the normal procedure of physical handing over of important and vital documents in the said Directorate of Revenue Intelligence, to his successor, and without taking a receipt for the same and also without giving to the successor a note about important pending matters in the Directorate of Revenue Intelligence. It was explained to the Chairman that proper lists of documents at Bombay alone would take a few days and that documents at Delhi also required to be listed.

That the meeting with the Chairman took place at about 11 A.M. and lasted about half an hour. At the said meeting Srivastava informed the Chairman that certain urgent matters pertaining to the Directorate, and consultations fixed for the same night with one of Counsel in Bombay regarding Mastan's case , were also to be attended to, at Bombay.

That Srivastava was then directed to proceed to Bombay for the afore-stated purposes of attending to the urgent matters and consultation fixed with the Counsel, and for preparation of the list of documents to be handed over at Bombay. The Chairman also agreed at the said meeting that Srivastava should prepare the necessary lists for handing over charge at Bombay and Delhi before handing over the charge.

That thereafter Srivastava left the office of the Chairman to leave for Bombay by plane scheduled to leave Palam Airport, New Delhi, at about 1.15 P.M.

When he reached Palam Airport at about 0.45 P.M. to emplane for Bombay, he was informed that there was a telephone message for him, directing him to contact Respondent No. 2 the Chairman of the Central Board of Excise and Customs, on telephone. He, in obedience to the said orders, contacted the Chairman on telephone. To his utter surprise, and contrary to the directions issued by the Chairman, during the afore-stated conference, he was directed that before flying to Bombay, he should sign a handing over report in respect of his charge as Director of Revenue Intelligence. He was also informed that further instructions would be conveyed to him at Bombay after consulting Shri H. Lal, Secretary to the Government of India , in the Ministry of Home Affairs. He was further informed that Shri M. G. Wagh, Director-General, was on his way to Palam with the requisite forms for handing over and taking over of the charge, and that if the said Shri M. G. Wagh did not arrive at Palam by the time the flight took off, he should write out a handing over charge report on an ordinary paper and leave it with the Palam Customs for onward delivery to Shri M. G. Wagh.

That although the mystery behind subjecting him to the said most humiliating manner of handing over charge of such an important office was incomprehensible to him, he obeyed to orders of the Chairman and wrote out a handing over charge on a sheet of paper. While he was about to hand-over the same to the Palam Customs staff, Shri M. G. Wagh, arrived on the scene with the printed handing over and taking over charge forms which were also signed by Srivastava and handed over to Shri M. G. Wagh.

That on reaching Bombay, Srivastava received advice from Shri M. G. Wagh, the Director-General, at about 6.30 on trunk telephone, informing him that he was permitted to attend the Conference with the Counsel fixed for the same evening and that it was desired that he should extend his help to the Directorate of Revenue Intelligence in all matters wherever he was required to do so.

That during his stay at Bombay he received information, through sources believed to be close to smugglers, which were both shocking and depressing. Srivastava was reported to have become ''the table talk'' amongst smugglers, who were reported to be openly publicising their strength and means, and rejoicing.

That the aforementioned impugned orders dated 27th of July 1970 completely broke him particularly in the background and by the mode in which the said orders were made and communicated.

He is informed by sources, who ought to know, and verily believes that his removal from the post of Director Revenue intelligence, is the direct result of the influence and efforts, of these whom he has exposed and particularly so during the last few months of his office as Director Revenue Intelligence. He submits that the unusual haste and hurry with which the impugned order dated 27th July, 1970 was made and the uncalled for and unusual anxiety and interest shown in making him handover charge at the Airport, points to the obvious.

In a further affidavit, he submitted:

Smuggling rackets are organised in the most dubious way and operated with utmost secrecy and by methods of gangsterism like the mafia of the USA. It is impossible for any person who dedicates himself to do anything useful in exposing these rackets to achieve anything without going to the battle front and directly and/or indirectly but ostensibly associating himself with these who are directly or indirectly connected with these rackets, although such an enterprise is attended by grave risks to the personal safety of such officer and of those whose assistance he seeks. There is no other magic formula to achieve the desired result than ostensibly associating with one or more of such persons and seeking their confidence, if anything worthwhile is to be achieved. The petitioner in his zest for his job and out of love for the mission he was assigned to, chose this grave and risky path-risky to himself, and slowly and steadily gained the confidence of some of such persons.

Unfortunately, his investigations exposed a good number of officers in the Government who came to be known to be actively associated with these rackets. The desperate device that was adopted by these affected was the earnest attempt to have the petitioner removed from the post and to that and they did many a thing, including the attempt to terrorise him and starting a campaign of vilification of which also timely notes of warning were sent to the Government from time to time.

There was a mention on the floor of the Lok Sabha on 26-11-1970, that Srivastava had visited the office allegedly to hush up an old smuggling case, in which Kanti Desai, son of Morarji Desai the former Finance Minister of the Government of India was involved allegedly carrying smuggled gold on 24-11-1970, in bis own car from Meerut.

Srivastava adds,

The anonymous complaint received in the Board about the alleged incident of smuggling of gold by the son of Shri Morarji Desai, after petitioner's removal from the post of Director of Revenue Intelligence, and the petitioner's alleged attempt to hush up the same and the Government's decision to have the same inquired into by the C.B.I. with regard to the petitioner's role therein, also found its way from the Board's office to outsiders. Likewise, the petitioner's written note to the 2nd Respondent submitted on the 30th day of July, 1970, to the effect that a very important smuggling case which has proved to be one of the biggest and most complicated of the matters under investigation about smuggling offences, had been attempted to be scuttled at an earlier stage by a Deputy Secretary in the Board, and that if it had not been taken out of his hands, the startling disclosures revealed during investigations would have never come to light, also failed to evince any interest of the Board or the 2nd Respondent.

The petitioner volunteers and pray, to the Government, through this Hon'ble Court, that the alleged complaints against the petitioner be referred to a secret high powered administrative committee of two or more Hon'ble Ministers of the Govt. of India, with known legal acumen, which our present Cabinet abounds in, so that the petitioner may furnish all relevant information to them, most of which is of top-secret nature. The petitioner would abide by the verdict of the said high powered Committee, after the petitioner is afforded the opportunity of placing his case before them, in the light of the contents of the alleged complaints against the petitioner and various other matters of great public importance and of highly secret nature.

The petitioner submits that the sudden decision, allegedly taken late on 25-7-70 which was a Saturday, mode of its communication, involving denial of opportunity to the petitioner even to visit his office between the time of passing of the order and its communication, absence of any convincing explanation for the delay about finalising the alleged tentative decision approved by the Minister in May, 1970, and by Prime Minister, as the Finance Minister, in June 1970, the smugglers being kept informed about the matter of the transfer about which the petitioner himself as also the officers of the Directorate were meticulously kept in dark, requiring the petitioner to hand over merely by the process of signing the charge report -indicate that there was something more behind the alleged transfer of the petitioner from the post of Director of Revenue Intelligence, than what has been disclosed by the 2nd Respondent.

Srivastava lost his case.

Incidentally, the post of Director of Revenue Intelligence carried a special pay of Rs.200/- per month and one of the grounds was that Collector of Central Excise was a lower post as it did not carry the special pay, which of course did not carry weight with the High Court.

Until next week