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Naresh J. Sukhawani v. Union Of India .
Factual and Procedural Background
The case arises out of an incident at Sahar International Airport, Bombay, where Customs officials apprehended one Sukhawani Solanki while he was trying to export foreign exchange valued at Rs 13,27,212. In his statement recorded under Section 108 of the Customs Act, Solanki said the currency had been given to him by Subhash Dudani for delivery to “Mr Kenny” in Hong Kong. Customs officials then apprehended Dudani, who in a Section 108 statement claimed that the currency originated from the present petitioner, Rajesh Sukhawani. A search of the petitioner’s premises on 21-12-1991 yielded no incriminating material.
Proceedings for confiscation and penalty followed. The Additional Collector ordered confiscation of the seized currency and imposed a penalty of Rs 1 lakh on the petitioner. On appeal, the Collector set aside that order. In suo motu revision, however, the Central Government reversed the Collector and restored the Additional Collector’s order. The Bombay High Court, in W.P. No. 1334 of 1995 (order dated 7-8-1995), affirmed the Government’s decision. The petitioner sought special leave to appeal from the Supreme Court, leading to the present order.
Legal Issues Presented
- Whether a statement recorded under Section 108 of the Customs Act from a co-accused (Subhash Dudani) can be treated as substantive evidence to establish the petitioner’s involvement in the attempted illegal export of foreign currency without independent corroboration under Section 30 of the Evidence Act.
Arguments of the Parties
Petitioner's Arguments
- The statement of a co-accused is admissible only for corroborative purposes under Section 30 of the Evidence Act and cannot by itself constitute substantive evidence.
- Because no independent evidence apart from Dudani’s statement exists, the finding of contravention and the imposition of penalty are legally unsustainable.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Supreme Court held that a statement recorded under Section 108 of the Customs Act is materially different from a statement recorded under Section 161 of the Criminal Procedure Code. A Section 108 statement is a “material piece of evidence” gathered by Customs authorities and is admissible as substantive evidence. Because Dudani’s statement explicitly inculpated both himself and the petitioner in the attempted export of foreign currency, the Court found sufficient evidence to affirm the finding of contravention. Consequently, the Court saw no illegality in the confiscation order or the penalty imposed, nor any ground to reduce the fine.
Holding and Implications
Special Leave Petition DISMISSED.
The dismissal leaves intact the confiscation of the seized foreign currency and the penalty of Rs 1 lakh against the petitioner. The Court’s affirmation underscores that statements recorded under Section 108 of the Customs Act can serve as substantive evidence without the need for independent corroboration, but the order does not purport to set any broader precedent beyond the customs enforcement context.
Order
1. The special leave petition arises from the order dated 7-8-1995 passed by the Bombay High Court in WP No. 1334 of 1995. The Customs officials at Sahar International Airport, Bombay apprehended one Sukhawani Solanki when he was attempting to export foreign exchange out of India valuing Rs 13,27,212. Mr Solanki in his statement recorded under Section 108 of the Customs Act by the Customs official, had stated that one Mr Subhash Dudani had given him the currency to hand over to Mr Kenny at Hong Kong. The Customs officials apprehended Mr Subhash Dudani who in his statement recorded under Section 108 stated that foreign exchange given to Solanki was received from one Mr Rajesh Sukhawani. Thereafter, the Customs officials traced the petitioner and had searched his premises on 21-12-1991 in his absence, but nothing incriminating was recovered.
2. The Customs officials initiated proceedings for confiscation of foreign exchange and used the statement of Mr Dudani against the petitioner. After enquiry and giving an opportunity to the petitioner, the Additional Collector confiscated the foreign currency and imposed a penalty of Rs 1 lakh. When the petitioner challenged the confiscation in appeal, the Collector set aside the said order. On suo motu revision, the Government reversed the order of the Collector and restored the order of the Additional Collector which was affirmed by the High Court by the impugned order. Thus the special leave petition.
3. The Joint Secretary to the Government, the revisional authority, has held that the evidence and the statement given by Mr Dudani incriminates the petitioner. This was established with reference to the photographs and other intrinsic material. On that basis, he concluded that Mr Dudani incriminated himself and the appellant in passing off foreign currency out of India, i.e, to Hong Kong. It was accordingly held that the contravention was established. It is contended that the statement of the co-accused could be used only to corroborate other evidence as one of the circumstances under Section 30 of the Evidence Act. But it cannot be used as substantive evidence without corroboration from other independent evidence. Except the statement of Dudani, there is no other independent evidence. Mr Dudani's evidence cannot be pressed into service to arrive at the conclusion that the petitioner is involved in the passing of foreign currency out of India.
4. It must be remembered that the statement made before the Customs officials is not a statement recorded under Section 161 of the Criminal Procedure Code, 1973. Therefore, it is a material piece of evidence collected by Customs officials under Section 108 of the Customs Act. That material incriminates the petitioner inculpating him in the contravention of the provisions of the Customs Act. The material can certainly be used to connect the petitioner in the contravention inasmuch as Mr Dudani's statement clearly inculpates not only himself but also the petitioner. It can, therefore, be used as substantive evidence connecting the petitioner with the contravention by exporting foreign currency out of India. Therefore, we do not think that there is any illegality in the order of confiscation of foreign currency and imposition of penalty. There is no ground warranting reduction of fine.
5. The special leave petition is dismissed accordingly.
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