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Kenal Vrajmohan Shah v. Department of Revenue Intelligence
Factual and Procedural Background
This opinion addresses an application for modification of conditions of bail granted to the applicant, who is one of the accused in proceedings initiated by the Directorate of Revenue Intelligence, Ahmedabad Zonal Unit, registered as F. No. DRI/AZU/GI-02/ENQ-42(INT-20/2015)2015, concerning an alleged offence under Section 135 of the Customs Act, 1962. The applicant was arrested on 5-10-2015 and granted bail by the Additional Sessions Judge, Ahmedabad City, vide order dated 20-10-2015, subject to certain conditions including restrictions on travel abroad, submission of passport, and periodic attendance at the customs department. The applicant subsequently sought modification of these bail conditions, citing business travel requirements and developments in the ongoing proceedings, including the matter being pending before the Settlement Commission, Customs and Central Excise at Mumbai.
Legal Issues Presented
- Whether the conditions of bail restricting the applicant from leaving India without court permission, requiring surrender of passport, and mandating periodic attendance at the customs department should be modified or deleted.
- Whether the pendency of the matter before the Settlement Commission affects the jurisdiction of customs officers and the necessity of the existing bail conditions.
Arguments of the Parties
Applicant's Arguments
- The applicant is a senior functionary of an industrial unit requiring frequent foreign travel for business purposes.
- The applicant has traveled abroad multiple times after release with court permission, returning timely and surrendering his passport each time.
- The alleged offence is compoundable, and the matter is now pending before the Settlement Commission at Mumbai, which affects the jurisdiction of customs officers.
- The tax liability and penalty amount are fully secured as the demanded amount has been paid.
- Requested deletion of bail conditions requiring court permission for travel and periodic attendance at the customs department.
- Noted that the court below had earlier modified the attendance condition from twice a month to once a month.
Respondent's Arguments
- The Additional Central Government Standing Counsel acknowledged the pendency of the matter before the Settlement Commission.
- The Additional Public Prosecutor for the State of Gujarat submitted that the State has limited interest and that an appropriate order should be passed.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Court analyzed the application by considering the nature of the alleged offence, which is compoundable, and the fact that the demanded amount has been paid with interest and further amounts are held by the department. The matter is pending before the Settlement Commission, which, according to communication dated 20-7-2016, removes the jurisdiction of customs officers over the subject case until an order is passed under sub-section (5) of Section 127C of the Customs Act, 1962. The Court noted the applicant’s compliance with bail conditions during prior foreign travels. Given these facts, the Court found no continuing purpose in maintaining bail conditions restricting travel without court permission and mandatory monthly attendance at the customs office solely for marking presence. Accordingly, the Court concluded that the bail conditions should be modified to remove these restrictions.
Holding and Implications
The application for modification of bail conditions is allowed.
The Court quashed and set aside the order dated 11-3-2016 of the Additional Sessions Judge, Ahmedabad City, and modified the order dated 20-10-2015 to delete condition Nos. 2, 6, and 9, thereby removing restrictions on the applicant’s foreign travel without court permission, the requirement to submit the passport, and mandatory attendance at the customs office for marking presence. The direct consequence is that the applicant is free to travel abroad without prior court approval and is not required to regularly attend the customs department for presence marking. No broader precedent was established beyond the direct effect on the parties.
[Order (Oral)]. - This is an application for modification of conditions of bail.
2. The applicant is one of the accused in the proceedings pursuant to the inquiry conducted by the Directorate of Revenue Intelligence, Ahmedabad Zonal Unit which is registered as F. No. DRI/AZU/GI-02/ENQ-42(INT-20/2015)2015. It is for the alleged offence under Section 135 of the Customs Act, 1962.
3. The applicant was arrested in connection with the above, on 5-10-2015. He was granted bail by the Additional Sessions Judge, Ahmedabad City vide order dated 20-10-2015 recorded on Criminal Misc. Application No. 3989 of 2015, on certain conditions. Condition Nos. 2, 6 and 9 read as under .
“2. shall not leave territory of India without prior permission of the Court;
6. shall submit his passport before the concerned I.O. within three days from today without fail, if having.
9. has to give his presence in the concerned department on every 9th and 18th of every month between 11.00 a.m. to 2.00 p.m. till the charge sheet is filed.”
4. Learned advocate for the applicant has submitted that, the applicant is a senior functionary of an industrial unit and he needs to travel abroad for business purpose frequently. It is further submitted that the applicant has, after his release, traveled abroad more than once, with the permission of the Court below and each time, he has returned in time and has surrendered back his passport. Details in that regard are placed on record. It is submitted that the applicant is not to flee away. It is further submitted that the alleged offence is compoundable and further that the matter is now pending before the Settlement Commission, Customs and Central Excise at Mumbai. Attention of this Court is invited to the communication in that regard dated 20-7-2016 of the said Commission. It is pointed that in view of that, now the Customs Officers will have no jurisdiction over the subject matter. It is further submitted that the tax liability and the amount of penalty which could be imposed is fully secured, since the amount asked for by the department is already paid. It is submitted that under these circumstances, the passport of the applicant be now returned to him. It is further submitted that the condition No. 9 asking the applicant to remain present before the concerned Department every month also be deleted. It is submitted that the applicant had already moved the Court below for this purpose by preferring an application being Criminal Misc. Application No. 647 of 2016. It is submitted that the Court below has, vide order dated 11-3-2016, modified the earlier order only to the extent that the applicant may attend the customs office only once in the month, instead of twice, which was ordered earlier. It is submitted that the order of the Court below dated 11-3-2016 be modified by suitably modifying the earlier order dated 20-10-2015.
5. On the other hand, learned Additional Central Government Standing Counsel has contested this application. However, he states that the fact, that the matter is pending before the Settlement Commission at Mumbai, is right.
6. Learned Additional Public Prosecutor for the State of Gujarat has submitted that the State would have less say in the matter and appropriate order be passed.
7. Having heard learned advocates for the respective parties and having gone through the material on record, this Court finds as under.
7.1 The alleged offence is compoundable.
7.2 The amount asked for by the department is paid with interest.
7.3 Further amount, as directed by the Court below is also lying with the department.
7.4 The matter is now pending before the Settlement Commission, Customs and Central Excise at Mumbai. Communication dated 20-7-2016 of the said Commission, inter alia records that, “...In other words, customs officers will have no jurisdiction over the subject case until an order is passed under sub-section (5) of Section 127C of the Customs Act, 1962 by the Settlement Commission”.
7.5 The applicant has, after his release, travelled abroad more than once, with the permission of the Court below and each time he has returned in time and has surrendered back his passport. Details in that regard are also on record.
7.6 In view of above, now no purpose would be served by still continuing the conditions that the applicant shall leave the country only with the permission of the Court, and further that he needs to attend the customs office every month, for the purpose of marking his presence.
7.7 The order of the Court below therefore needs to be modified to the extent that, the applicant shall now onwards not be required to take permission of the Court to travel abroad and further that he need not attend the customs office, only for the purpose of marking presence. This application needs to be allowed to this extent.
8. For the reasons recorded above, the following order is passed.
8.1 This application is allowed.
8.2 The order dated 11-3-2016 passed by the Additional Sessions Judge, Ahmedabad City in Criminal Misc. Application No. 647 of 2016 is quashed and set aside. The said application stands allowed. Resultantly, the order dated 20-10-2015 passed by the Additional Sessions Judge, Ahmedabad City in Criminal Misc. Application No. 3989 of 2015 is modified to the extent that condition Nos. 2, 6 and 9 thereof stand deleted.
8.3 Rule is made absolute. Direct service is permitted.
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