MUMBAI, MAR 28, 2007 : THE applicant was arrested on 24.11.2006 under Section 104 of Customs Act. The allegation is that the applicant is concerned with the fraudulent import of the goods i.e. Fabrics against Advance Licence under DEEC Scheme issued in the name of M/s. Suvidh Overseas Mumbai, which has also been fraudulently obtained and diverted the same in the local market. Applicant was produced before the Addl. Chief Metropolitan Magistrate (ACMM for short) on 24.11.2006 and his remand was sought, inter alia, on allegation that he procured IEC from other arrested persons and imported large number of Fabrics at Tuticorin Port which were cleared duty free against actual user condition. Applicant’s application for bail was rejected on 25.11.2006. Applicant was remanded to judicial custody till 4th December, 2006.

The submission of the applicant is that the ACMM failed to appreciate that offence under Section 135(1)(ii) of the Customs Act, 1962 is a bailable offence. Therefore, there is no warrant for declining to grant bail in an offence which is bailable as held by the High Courts and Supreme Court.

The Judicial decisions :

The Bombay High Court had in SUBHASH CHOUDHARY had held that an offence under Section 135 was bailable. Against this Revenue had filed SLP in the Supreme Court. Meanwhile the Punjab and Haryana High Court following the Bombay High Court judgement also held that the offence under the Customs Act was bailable. Revenue appeal against the P&H High Court order was dismissed by the Supreme Court.

In the High Court

On the date of hearing, the alleged offenders handed over demand drafts to the tune of Rs.49 lakhs to the Department. The High Court observed that, “It is true that at this stage payment of the alleged duty liability will not be sufficient enough to enlarge the applicant on bail.” But the High Court observed,

1.  The Hon’ble Supreme court has cautioned all throughout that a co-ordinate bench cannot ignore a decision which is binding upon it.

2. Merely because some arguable point is raised it is not possible to ignore a binding precedent.

3. Judicial discipline and propriety demands that another learned Single Judge of this court should follow the prior view unless it is shown that the same is per incuriam. That aspect has not been highlighted.

4. Even otherwise, the matter being pending before the Supreme Court, it would not be proper to brush aside the judgment of the learned Single Judge.

5. More so, when it is followed by Punjab and Haryana High Court and a Special Leave Petition from its decision is summarily dismissed.

So, following its earlier decision, the High Court ordered that

(i) The applicant shall be enlarged on bail for sum of Rs.1,50,000/- with one or two local sureties in the like amount;

(ii) The applicant shall report to Intelligence Officer, Directorate of Revenue Intelligence, Mumbai twice a week till the complaint is filed and thereafter as per the directions of the trial court.

(iii) The applicant shall deposit his passport forthwith with Intelligence Officer, Directorate of Revenue Intelligence, Mumbai. Deposit of passport is condition precedent for release of applicant on bail;

(iv) The applicant shall not leave India without prior permission of the trial court.

(v)  The applicant shall furnish his address to the Investigating Officer where he proposes to reside after bail and during pendency of the trial. The applicant shall not change his residence without prior intimation of the Investigation Agency;

(vi)  The bail is granted subject to condition that the applicant shall not, directly or indirectly, make any inducement or threat to any prosecution witnesses and shall not in any manner tamper with prosecution evidence;

(vii) The applicant shall cooperate with the Trial Court for expeditious disposal of the trial. Any attempt by the applicant to delay the trial may be a ground for cancellation of bail;

(viii) Any observation/s made in this order shall not be construed as any finding or any expression of opinion on the merits of the case at the time of trial.

Tailspark : Incidentally the Delhi High Court after considering the Bombay High Court judgement had observed in 2005-TIOL-207-HC-DEL-CUS,  “Having gone through the decision in Subhash Chaudhary (supra), it is difficult to subscribe to the view taken therein as the same would appear to suffer from inherent contradictions.” And went on to hold that the Customs Offence is not a bailable one. Obviously this decision was not brought to the notice of the Court in this case.

(See 2007-TIOL-147-HC-MAD-CUS in 'Customs' + 2007-TIOL-147-HC-MUM-CUS in 'Legal Corner')