Bhavin Impex Pvt. Ltd. vs Union of India (UOI)

A.L. Dave, J.—Petitioner No. 1 is a Private Limited Company, registered and incorporated under the Companies Act, 1956, and is engaged in the manufacture of mixed brass scrap since 2001, and is working as a 100% Export Oriented Unit [''EOU''] since 2005 under the EXIM Policy of India. In regular course of its business petitioner requested for Procurement Certificate on 7-2-2008 for mixed brass scrap. Respondent authorities found that it was under-priced, to which a reply was given by the Petitioner No. 1 company that, that transaction was of a previous month and therefore the price prevailing in the said month may not be considered. On 14-2-2008 premises of the petitioner company was searched and certain documents and materials were seized by drawing a panchnama. At that time initially Mukesh Sayani, brother of Petitioner No. 2 was present and thereafter Petitioner No. 2 also appeared at the place. It transpired from the panchnama that Mukesh Sayani looks after company affairs in absence of Sanjay Sayani. Statements of Sanjay Sayani and Mukesh Sayani were recorded by respondent Customs authority at that point of time. Thereafter a complaint was made by Petitioner No. 2 to Police Commissioner, Rajkot, in respect of what has transpired at the time of said raid/search & seizure. Subsequently a criminal complaint came to be lodged in the Court of learned Chief Judicial Magistrate by Petitioner No. 2 alleging various offences against Vinay Kumar, Zala, Rajesh Sharma and Ravindra Yadav. Thereafter a Special Civil Suit has been instituted by the petitioners in the Court of Principal Sr. Civil Judge, Jamnagar bearing Special Civil suit No. 20/2008 for damages in respect of some transaction. This suit was filed in March, 2008. Thereafter petitioners approached this Court on 12-3-2008 with present petition seeking following reliefs:

In the premises aforesaid, the petitioners pray as under:

A. Your Lordships be pleased to issue a writ of or in the nature of mandamus declaring the action of the officers under the Respondent No. 2 of entering in the factory premises and seizing documents, records and computers of the Petitioner No. 1 as being unconstitutional, illegal and void. And be further pleased to direct the Respondent No. 2 to order the return of the same to the petitioners.

B. Your Lordships be pleased to issue a writ of or in the nature of mandamus declaring the action of the Respondent No. 3 of withholding Procurement Certificates to the Petitioner No. 1 as being unconstitutional and illegal and be further pleased to direct the Respondent No. 3 not to withhold issuance of procurement Certificates to the Petitioner No. 1 in respect of import of mixed brass scrap by it.

C. Pending admission, hearing and final disposal of the petition your Lordships be pleased to direct the Respondent No. 2 to supply authenticated copies of all documents and registers seized on 14-2-2008 and authenticated copies of date contained in the computers seized on 6-3-2008 to the petitioner.

D. Pending admission, hearing and final disposal of the petition your Lordships be pleased to direct the Respondent No. 3 to issue Procurement Certificates as applied for by the petitioners on 7-2-2008 and 28-2-.2008 and be further pleased to direct the Respondent No. 3 not to withhold issuance of Procurement Certificates to the Petitioner No. 1, on such terms and conditions as deemed just and proper by the Hon''ble Court in the facts and circumstances of the case.

E. Ex parte ad interim relief in terms of prayer C and prayer D above be granted.

F. Such other and further reliefs as deemed just and expedient be granted.

On 4-4-2008 this Court after hearing both the sides passed an order making following observations:

Having heard the learned Counsel for the parties, we direct that upon the petitioners furnishing bank guarantee of Rs. 12.50 lacs in the first instance, the respondents shall start issuing duty free import/procurement certificates subject to the condition that the petitioners shall comply with all the directions and safeguards which may be suggested by the respondents while issuing such procurement certificates. The second bank guarantee of Rs. 12.50 lacs will be furnished in the first week of May 2008. Both these bank guarantees, viz. Bank guarantees for the total amount of Rs. 25 lacs shall be for securing the petitioners'' liability, if any, in respect of the goods, which are imported and are to be imported under such duty free import/procurement certificates and the petitioners shall comply with the directions to be issued by the respondents for the purpose of safeguarding interest of the revenue.

It is clarified that the petitioners will not be required to furnish bank guarantee at the time of each import or at the time of obtaining each procurement certificate.

It is also directed that the petitioners shall cooperate with the respondent authorities in the investigation/inquiry, which is pending.

It is clarified that the observations made and the directions issued herein above are without prejudice to the rights and contentions of the parties and they may not be treated as expression of any opinion either way.

It appears that, thereafter, the respondent authorities have summoned Petitioner No. 2 as well as his brother Mukesh Sayani on number of occasions, but neither Petitioner No. 2 nor his brother Mukesh Sayani has ever appeared before respondent authorities pursuant to the summons on the alleged apprehension of being mishandled by respondent authorities or of being falsely implicating in criminal case.

3.1 In the meanwhile Civil Application No. 5050/2008 came to be filed by the petitioners seeking following reliefs:

A. That the Hon''ble Court be pleased to direct the respondent authorities to send a list of queries or questions. If any, during the course of proposed inquiry/investigation to the applicants and the persons questioned on behalf of the applicants and be pleased to permit the applicants and the persons so questioned on their behalf to submit their responses and/or replies in writing.

B. That the Hon''ble Court be pleased to direct the respondent authorities to question and/or record statement of applicants or any persons summoned on their behalf in premises of a Court and in presence of a lawyer of the persons so summoned;

C. That the Hon''ble Court be pleased to direct the respondent authorities to forthwith issue import/procurement certificates in favour of the Applicant No. 1 pursuant to the order dated 4-4-2008 passed by this Court in Special Civil Application No. 4517 of 2008.

And the Court by order dated 25-9-2008 observed thus:

In the above view of the matter, we are of the view that prayer B made in the present Civil Application seems to be quite just and proper and hence, the applicant''s advocate is permitted to remain present though at a distance from where he can see the proceedings of the interrogation. However, in any case, the lawyer shall not be permitted to interfere in the proceedings. In view of the indulgence shown while granting prayer B, Mr. Joshi does not press prayer A made in the present application. Since the import/Procurement Certificate has already been granted, prayer C does not survive. The applicants shall remain present before the respondent authorities in pursuance of the summons already issued latest by 30-9-2008.

It appears from the affidavits filed on record of this Court that even thereafter inspite of being summoned, Petitioner No. 2 has chosen not to appear before the respondent authorities.

The respondents have in their affidavit-in-reply inter alia contented that the petition is filed only with a view to thwart the investigation being carried out against them. This Court in exercise of its jurisdiction under Article 226 of the Constitution may not interfere with the same. The petitioners have not come out with clean hands as they have not narrated correct facts before this Court. The documents and material gathered during search operation conducted on 14-2-2008 as well as the statement of Kishorebhai K. Bhagat, the Accountant and statement of Sanjay Natvarlal Sayani, Petitioner No. 2, recorded on 14-2-2008 under provision of Section 14 of the Central Excise Act 1944 contains unequivocal admission with regard to recovery of draft chits from possession of said Mr. Bhagat and also which were termed to be miscellaneous chits of M/s. Bhavin Impex Pvt. Ltd. the Petitioner No. 1. The material indicated clearly that there is clandestine removal made by the petitioner which may come to Rs. 2 : 91 Crores, involving Central Excise Duty worth Rs. 67 : 00 lacs approximately, which indicate claim of clandestine removal by the petitioners. The averments made in page-88 of the affidavit-in-reply also indicate clandestine removal of the goods which talks about the statement given by petitioner No. 2 on his own handwriting and the theory of so called beating and coercion, which was nothing but an after thought only to browbeat the officers so as to prevent them from discharging their duties.

We have heard learned Sr. Advocate Mr. Joshi appearing with Ms. Megha Jani for the petitioners and learned Counsel for Customs Mr. Oza.

Learned senior advocate Mr. Joshi submitted that the respondent authorities have acted in a high handed manner. There is total absence of material to show as to what prompted them for search & seizure of the premises of the petitioners. The petitioners were manhandled and immediately complaints have been lodged in this regard. Petitioner No. 1 is a company and Petitioner No. 2 is director of that company and are basically business people. They are in the business and would not enter into tussle with respondent authorities only for the sake of confrontation unless their apprehension is genuine and therefore their interest may be protected by this Court by issuing appropriate directions to the respondent authorities who have acted in a high handed manner.

Mr. Joshi on instruction states at the Bar that:

Mukesh Sayani, director of petitioner company would respond to the summons issued by the respondent at the date and time stipulated. Sanjay Sayani is no longer director of the company.

Mr. Joshi has therefore submitted that appropriate order and/or directions may be issued to respondent authorities.

Learned Counsel Mr. Oza for the respondent submitted that the conduct of the petitioner would reflect total lack of bona fide. He submitted that Petitioner No. 2 has taken recourse to all available remedies and this petition may not be entertained on that count. He also submitted that Respondent No. 2 has not cooperated with respondent authorities in investigation despite directions of this Court passed in the order dated 4-4-2008 while granting interim relief. Petitioner No. 2 has not cooperated even after this Court passed order on 25-9-2008 in Civil Application No. 5050/2008. The petitioner therefore does not want to cooperate with the investigation which is being done in accordance with law and extraordinary jurisdiction may not be exercised by this Court in such a situation.

Mr. Oza reacting on statements made by Mr. Joshi submitted that the stand of Petitioner No. 2 is the same throughout. The statement is in respect of Mukesh Sayani, who may be a director of the company, who is not a party in this proceeding. Lastly Mr. Oza submitted that on account of disobedience of order of this Court respondent authorities have initiated contempt proceedings against Petitioner No. 2 by preferring Misc. Civil Application (Contempt) No. 2721/2008, wherein notice has been issued by the Court. According to Mr. Oza, if the statement is accepted and some indulgence is granted, then, it can be used by the petitioners as a defence in the contempt petition. Lastly Mr. Oza submitted that the investigation is dodged by the petitioners under one pretext or the other and simultaneously are enjoying interim relief which cannot be permitted to be done, and, therefore, the petition may be dismissed.

10.1 We have taken into consideration rival submissions. We find that there is no dispute on legal authority in the respondents to inspect the premises, seize the documents and initiate proceedings for investigation. Regarding what is alleged to have transpired on the day of raid, the petitioners have already initiated civil and criminal proceedings. Differently put, they have already resorted to alternative remedy available to them.

10.1.1 The factum with regard to giving statement by petitioner No. 2 on 14-2-2008 as stated on page No. 86 of the memo of reply affidavit on record (interim page-12) has not been controverted by the petitioners anywhere on the record. It is important to note that no immediate complaint is lodged, though for the first time complaint came to be lodged on behalf of the petitioners to the Police Commissioner only on 28-2-2008 which contains some so called misbehavior and manhandling by the officers on 14-2-2008, i.e. the date on which search was carried out, which includes allegation regarding slapping of petitioner No. 2''s brother, hurling of abuses and administering threats. This aspect needs to be borne-in-mind while examining the matter and the prayers made in this petition. The fact remains to be noted that, thereafter, complaint before Magistrate came to be filed in March 2008 on the same line wherein only investigation is ordered by concerned Court as stated by advocate for the petitioners and Special Civil Suit for damage & defamation is filed being Special Civil Suit No. 20 of 2008 in March 2008 for Rs. 5.00 Crores against the officers in question.

10.1.2 We find that this Court, initially on 4-4-2008, granted interim relief in favour of the petitioner as stated above, subject to a direction that the petitioner shall cooperate with the respondent authorities in investigation/inquiry which is pending. It is not in dispute that none of the petitioners nor Mukesh Sayani who was also summoned on number of occasions have appeared before respondent authorities pursuant to the summons. This conduct on part of the petitioners is an act of non-cooperation in investigation/inquiry, for whatever reasons or on whatever apprehensions. The petitioners'' conduct demonstrates their scant regard for Law, Legal System & Legal Order passed by this Court. The petitioners have paid no heed to the direction of this Court & have only enjoyed the interim relief which was granted, subject to the direction to cooperate in investigation.

10.1.3 The petitioners preferred Civil Application No. 5050/2008 and again this Court granted indulgence by permitting the petitioners to keep present their lawyer at the time of interrogation/inquiry. They were required to appear before the respondent authority by 30-9-2008. It is stated that on 26-9-2008 Mukesh Sayani and Sanjay Sayani appeared before respondent authorities with their lawyer, but on the said date the officer concerned was not available. But thereafter also petitioner No. 2 has not responded to any summons, inspite of such protection being granted by the Court, and has harped on apprehension, which, looking to the conduct of petitioner No. 2 does not seem to us to be genuine. Petitioner No. 2 seems all determined not to appear before the respondent authorities & is thus not ready to cooperate in investigation under on excuse or other. This is clear even from the statement made by learned Sr. Advocate Mr. Joshi upon his instructions. Petitioners'' stand is that whatever were required to be stated by the petitioners were already stated earlier and the questionnaire may be sent to them. When inquiry is to be made in respect of a suspected evasion of duty, which is ordinarily done in a clandestine manner, it would raise many questions which can be answered only upon the person concerned being questioned. This would not only help the investigation/inquiry being conducted in right direction but would also help the party concerned to explain & put forth their case/version. Stand of petitioners of not appearing before respondent authorities would only cause hindrance in a lawful process. Be that as it may; the fact remains that the petitioners have not cooperated in investigation despite directions of this Court, and the stand is that although the petitioners may not cooperate in investigation/inquiry, and both the petitioners may not obey direction of the Court, still the Court may entertain this petition. Such a stand can not be accepted. Extraordinary jurisdiction under Article 226 of Constitution of India can be invoked to support & supplement the due process of law or to protect constitutional right of a law abiding citizen, and not to support a citizen''s attempt to obstruct the due process of law even by disobeying the direction of this Court. Such powers can not be invoked to circumvent the process of law. The petition, therefore, must fail. The petition stands dismissed. Notice discharged. Interim reliefs stand vacated.

We make it clear that we have not made any observation on merits of the case.

At this stage, a request is made by learned senior counsel for the petitioners to suspend operation of this order for some time to enable the petitioners'' to approach higher forum. No case is made out for keeping our own order in abeyance, considering the facts of the case. Request is therefore turned down.