[Order per : R.M. Doshit, C.J. (Oral)]. - Interlocutory Application No. 4756 of 2011 : The delay of 6 days occurred in filing this appeal is condoned.
Letters Patent Appeal No. 1045 of 2011 :
2. With the consent of the learned advocates the appeal is heard and decided today.
3. This appeal preferred under Clause 10 of the Letters Patent is preferred by the Union of India and the Directorate of Revenue Intelligence against the judgment and order dated 20th May, 2011 passed by the learned Single Judge in above C.W.J.C. No. 16678 of 2010.
4. The subject matter of dispute is the seizure of 27420 kgs. betel nuts, 45 bicycles, one tricycle, one weighing machine and tarpaulin by the appellant Directorate of Revenue Intelligence from the godown of the respondent Md. Mazid @ Md. Tufani at Farbisganj carried out on 19th September, 2010. Pursuant to the said seizure, confiscation proceedings have been initiated. The show cause notice has been issued on 9th March, 2011. Feeling aggrieved by the seizure of the aforesaid stock of the betel nuts the respondent filed above C.W.J.C. No. 16678 of 2010 under Article 226 of the Constitution.
5. According to the respondent, he is an authorized agent duly licensed to purchase the seized goods from National Co-operative Consumer’s Federation of India Ltd. (hereinafter referred to as ‘the NCCF’). The stock of betel nuts seized by the appellants was earlier purchased by the respondent in the month of July, 2009. On account of a pending dispute, the said stock was not disposed of and was stored in the godown of the respondent. The respondent challenged seizure also on the ground that the betel nut is not prohibited goods and could not have been seized.
6. Petition was contested by the appellants. According to the appellants, the appellants had the information that prohibited goods, namely, third country origin betel nuts were smuggled from Nepal through carriers in small quantity and were stored in the godown of the respondent. Acting on the said information the search and seizure was carried out. The claim that the seized stock of the betel nuts was the same that was purchased by the respondent in the month of July, 2009 was denied.
7. The learned Single Judge has allowed the writ petition. The learned Single Judge has accepted the plea taken by the respondent of purchasing stock of confiscated betel nuts from the NCCF and that the betel nut was not a prohibited goods. Having considered the arguments of both the parties the learned Single Judge was pleased to hold that the only valid reason for seizure can be that the goods were of the foreign origin but the onus to prove the same was wholly on the customs authorities and the customs authorities failed to prove the same. The learned Single Judge has also held that no seizure can be carried out on mere suspicion unless there were a reasonable belief. Consequently, the learned Single Judge has set aside the seizure but has allowed the confiscation proceedings to proceed further. Therefore, the present appeal.
8. Learned advocate Mrs. Archana Meenakshee has appeared for the appellants. She has assailed the judgment of the learned Single Judge. She has submitted that the appellants did have the materials to form a belief that the smuggled goods were stored in the godown of the respondent. She has taken us through the materials on record.
9. The appeal is contested by learned advocate Mr. Prabhat Ranjan. He has supported the judgment of the learned Single Judge. He has submitted that mere information recorded by some officer cannot be the basis for reasonable belief. He has also submitted that the documents produced on the record of appeal though were available to the appellants were not produced in the writ petition. He has also submitted that certain statements produced in the writ petition are ex facie forged document. He has submitted that though the show cause notice dated 9th March, 2011 specifically states that Shri Anand Mohan Pandey, the Accountant in the District Co-operative Federation, Kanpur did not respond to the notice issued by the appellants, the statement purported to have been given by the said Anand Mohan Pandey is annexed to the counter affidavit. Obviously, the statement annexed to the counter affidavit is a forged document. He has further submitted that the appellants have relied upon the statement made by one Rajendra Kumar Tiwary. A criminal proceeding against the said Rajendra Kumar Tiwary is pending pursuant to the complaint made by the respondent. Such a statement cannot be relied upon to strengthen the case of the appellants.
10. In exercise of power of judicial review conferred by Article 226 of the Constitution, the Court has a very limited scope in the matter of challenge to the order of search and seizure. The Court would only ascertain whether there was any material before the appellants to form a reasonable belief. The adequacy of evidence or the probative value of the evidence is not the subject to be considered by the Court. In the present case, as recorded hereinabove, the appellants did have the information that the stock of betel nuts was stored in the godown of the respondent. The claim of the respondent that it was the same stock that he had purchased from the NCCF through the District Consumer Federation, Kanpur in the month of July, 2009, prima facie, appears to be farfetched. Such a claim undoubtedly requires to be enquired into. The learned Single Judge has manifestly erred in weighing the evidence produced on the record and to consider the plausible defence of the respondent. This was clearly beyond the jurisdiction under Article 226 of the Constitution. The learned Single Judge has also erred in observing that onus to prove that the seized goods were of foreign origin lay upon the Customs authorities. Section 123 of the Customs Act, 1962 specifically lays the onus of proof on the person from whose possession the goods are seized or on any other person who claims to be the owner of the goods. The aforesaid statement of law made by the learned Single Judge is erroneous. Further the learned Single Judge has though set aside the order of seizure, has permitted the confiscation proceedings to proceed. A confiscation proceeding has to be preceded by a valid seizure. Unless the seizure is upheld the confiscation proceeding cannot proceed further.
11. For the aforesaid reasons, we allow this appeal. The impugned judgment and order dated 20th May, 2011 passed by the learned Single Judge in C.W.J.C. No. 16678 of 2010 is set aside. C.W.J.C. No. 16678 of 2010 is dismissed.
12. The appellants will, however, release the stock of seized betel nuts on the respondent furnishing a bank guarantee in the sum of Rs. 25,00,000/- (twenty five lacs). The bank guarantee will be kept alive throughout the confiscation proceedings.
13. The Interlocutory Applications stand disposed of.
14. Parties will bear their own cost.