M/s The Phoenix Mills Ltd. vs Central Bureau of Investigation

N.D. Kamat, J.—This is a petition filed u/s 439 of the Code of Criminal Procedure for quashing the proceedings in Criminal Case No. 351/p of 1970 pending against the petitioners in the Court of the Additional Chief Presidency Magistrate, 32nd Court, Esplanade, Bombay. The relevant facts leading to this petition are briefly these:-

Petitioner No. 1 M/s. Phoenix Mills Ltd. is a company manufacturing cotton and other fabrics at Bombay. Petitioner No. 2 Radhakrishna Ramnarain Ruia and Petitioner No. 3 Ashok Kumar Radhakrishna Ruia are the Directors and petitioner No. 4 Bhaskar Anant Mchendale is the Accountant of this Company. During the period from August 28, 1964 to April 7, 1965, petitioner No. 1 obtained as many as twelve licenses for importing certain quantities of Bayer Perlon Yarn and Nylon Yarn. Those licenses were issued by the Licensing Authority to petitioner No. 1 Company, subject to the following conditions:

(1) The quantity of Staple Fiber imported against this allocation shall not be transferred or sold to any other person or persons without the written permission of the Textile Commissioner and

(2) All items of goods imported under the licence, shall be utilised only in the licence-holder''s factory and no portion thereof will be utilised by any other party,

All the twelve licenses were operated by petitioner No. 1 Company and the permitted quantities of Bayer Perlon Yarn and Nylon Yarn were imported into India at Bombay. However, in contravention of the conditions of the licenses, the petitioner company disposed of those goods to different parties during the period from October 1966 to March 1967 without the written permission of the Textile Commissioner and without utilising any of those goods in the factory of petitioner No. 1 Company.

On October 5, 1970, the Central Bureau of Investigation, Economic Offences Wing, Bombay, sent up a charge-sheet to the Court of the Additional Chief Presidency Magistrate, 32nd Court, Esplanade, Bombay, alleging that during the period from October 1966 to March 1967 at Bombay, the petitioners had entered into a criminal conspiracy with the object of disposing of the aforementioned imported goods in contravention of the conditions of the licenses issued to them and that in pursuance of that conspiracy and in furtherance of their common intention, they had actually disposed of those imported goods to different parties under thirty eight invoices and they had thus committed an offence u/s 120B of the Indian Penal Code read with section 5 of the Imports and Exports (Control) Act, 1947. Before sending up of the charge-sheet, consent of the State Government for initiation of the proceedings was obtained on March 21, 1971, u/s 196A (2) of the Code of Criminal Procedure. On receipt of the charge-sheet, the learned Magistrate issued process.

The petitioners appeared before the learned Magistrate and on April 21, 1971, they made an application saying that conspiracy to commit an offence falling u/s 5 of the Imports and Exports (Control) Act, 1947, where overt acts have taken place pursuant to the conspiracy, is punishable as abetment u/s 5 of the said Act and that in the absence of a complaint in writing by an officer authorised in this behalf by the Central Government by general or special order, no Court was entitled to take cognizance of such an offence. They also stated that the authority designated u/s 6 of the Imports and Exports (Control) Act, 1947 having refused to file a complaint, the prosecution was attempting to evade and circumvent the mandatory provisions of section 6 of the Imports and Exports (Control) Act, 1947, by initiating proceedings merely for an offence u/s 120B, Indian Penal Code read with section 5 of the Imports and Exports (Control) Act, 1947. They prayed that for want of proper complaint made by a duly authorised officer, the proceedings initiated against them should be terminated and/or they be discharged. The above application filed by the petitioners was opposed by the prosecution and it was submitted that the petitioners were guilty of the offence of conspiracy u/s 120B of the Indian Penal Code read with section 5 of the Imports and Exports (Control) Act, 1947 and also of the offence of contravention of the conditions of the licence u/s 5 of the said Act and both these offences were quite distinct offences. The petitioners could, therefore, be prosecuted for the distinct offence of conspiracy, with the consent of the State Government. According to the prosecution, the provisions of section 6 of the Imports and Exports (Control) Act, 1947 are no impediment in their way inasmuch as the petitioners were being prosecuted merely for the offence of conspiracy u/s 120B of the Indian Penal Code read with section 5 of the Imports and Exports (Control) Act, 1947, which is a distinct offence from the offence u/s 5 of the Imports and Exports (Control) Act, 1947.

The above submission made on behalf of the prosecution found favour with the learned Magistrate. He, therefore, by his order, dated May 19, 1971 rejected the Petitioner''s application, dated April 21, 1971. The petitioners have thereupon filed the present petition in this Court.

Section 5 of the Imports and Exports (Control) Act, 1947, provides :

If any person contravenes, or attempts to contravene, or abets a contravention of any order made or deemed to have been made under this Act. or any condition of a licence granted under any such order, he shall, without prejudice to any confiscation or penalty to which he may be liable under the provisions of the Customs Act, 1962 (52 of 1962) be punishable with imprisonment for a term which may extend to two years and also with fine:

Provided that in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the Court, such imprisonment shall not be for less than six months.

What is important to be noted is that section 5 makes not only contravention of any order made under this Act or any condition of a licence granted under any such order, but also attempt to contravene or abetment of such contravention, punishable. Section 6 then lays down :

No Court shall take cognizance of any offence punishable u/s 5 except upon complaint in writing made by an officer authorised in this behalf by the Central Government by general or special order, and no Court inferior to that of a Presidency Magistrate or a Magistrate of the first class shall try any such offence.

Mr. Jethmalani, learned counsel for the petitioners, urged that when ever, in addition to the conspiracy alleged, overt acts are said to have taken place in pursuance of the conspiracy, the totality of the allegations amounts to abetment u/s 5 and consequently no Court can take cognizance of such an offence without a proper complaint made in writing by an officer authorised in that behalf by the Central Government. According to Mr. Jethmalani, whenever the law requires a complaint or sanction by a particular authority as a condition to be satisfied before initiation of criminal proceedings, that requirement also applies to the abetment, attempt or conspiracy to commit that offence. He therefore urged that by making a statement that the petitioners were being prosecuted merely for the offence of conspiracy u/s 120-B of the Indian Penal Code, read with section 5 of the Imports and Exports (Control) Act, 1947, the prosecution was clearly attempting to evade and circumvent the mandatory provisions contained in section 6 of the Imports and Exports (Control) Act, 1947. There is undoubtedly considerable force in the above submissions made by Mr. Jethmalani.

Provisions similar to those of section 5 of the Imports and Exports (Control) Act, 1947, are contained in section 195 (l)(a) and (b) of the Code of Criminal Procedure, which provides :

(I) No Court shall asked cognizance-

(a) of any offence punishable under sections 172 to 188 of the Indian Penal Code, except on the complaint in writing of the public servant concerned, or of some other public servant to whom he is subordinate;

(b) of any offence punishable under any of the following sections of the same Code, namely, sections 193, 194, 195, 196, 199, 200, 205, 206, 207, 208, 209, 210, 211 and 228, when such offence is alleged to have been committed in, or in relation to, any proceeding in any Court, except on the complaint in writing of such Court or of some other Court to which such Court is subordinate;

Sub-section (4) of the same section then provides :

(4) the provisions of subsection (1), with reference to the offences named therein, apply also to criminal conspiracies to commit such offences and to the abetment of such offences, and attempts to commit them.

There is ample authority for the proposition that section 195 of the Code of Criminal Procedure does not bar the trial of an accused person for a distinct offence disclosed by the same facts and which is not included within the ambit of that section. In Narayana Ayyar Vs. G. Veerappa Pillai, , the question that arose for decision was whether an alleged defamer who had given false evidence in Court could be prosecuted u/s 499 of the Indian Penal Code without a complaint by the Court before whom he gave evidence. After an exhaustive review of the decided cases of the different High Courts in India, a Full Bench of the Madras High Court held that the offence of giving false evidence in a judicial proceeding and defamation do not belong to the same genus but are distinct and separate in their characteristics and ingredients and it was there fore difficult to perceive any serious inhibition by the Criminal Procedure Code for initiation and trial of one of these offences independently of anterior resort to fulfilling the conditions necessary to commence a prosecution for the other. It is therefore necessary to see whether the offence of conspiracy u/s 120-B of the Indian Penal Code, read with section 5 of the Imports and Exports (Control) Act, 1947, for which the prosecution seeks to prosecute the petitioners, is primarily and essentially an offence different from the offence falling within the ambit of section 5 of the Imports and Exports (Control) Act, 1947.

In Basir-ul-huq and Others Vs. The State of West Bengal, , a similar question u/s 195 of the Code of Criminal Procedure came up for consideration and the Supreme Court has clearly observed in its judgment (p. 296) :

Though, in our judgment, section 195 does not bar the trial of an accused person for a distinct offence disclosed by the same facts and which is not included within the ambit of that section it has also to be borne in mind that the provisions of that section cannot'' be evaded by resorting to devices or camouflages. The test whether there is evasion of the section or not is whether the facts disclose primarily and essentially an offence for which a complaint of the Court or of the public servant is required. In other words, the provisions of the section cannot be evaded by the device of charging a person with an offence to which that section does not apply and then convicting him of an offence to which it does, upon the ground that such latter offence is a minor offence of the same character, or by describing the offence as being one punishable under some other section of the Indian Penal Code, though in truth and substance the offence falls in the category of sections mentioned in section 195, Criminal Procedure Code. Merely by changing the garb or label of an offence which is essentially an offence covered by the provisions of section 195 prosecution for such an offence cannot be taken cognizance of by mis-describing it or by putting a wrong label on it.

Now, in the charge-sheet submitted by the Central Bureau of Investigation, Economic Offences Wing, Bombay, against the petitioners they have clearly stated that during the period from October 1966 to March 1967 the petitioners had entered into a criminal conspiracy to dispose of the imported goods in contravention of the condition of the licenses granted to them and in pursuance of the said conspiracy the petitioners had actually disposed of the imported goods to different parties under thirty eight invoices. In para. 12 of the charge-sheet they have specifically stated :

Thus in pursuance of the said conspiracy during the said period at Bombay and in furtherance of the common intention of the accused Nos. 2 to 4, the imported goods mentioned above have been disposed of by the accused persons in contravention of the conditions mentioned above. Thus the accused persons mentioned above have committed the breach of conditions of the Imports and Exports (Control) Act. 1947, and these accused persons have committed offences u/s 120-B Indian Penal Code read with section 5 of the Imports and Exports (Control) Act, 1947.

From the above allegations made in the charge-sheet it is obvious that the offence which the petitioners are alleged to have committed falls squarely and fully within the ambit of section 5 of the Imports and Exports (Control) Act, 1947, though the officer who sent up the charge-sheet has chosen to state that this offence falls u/s 120-B of the Indian Penal Code, read with section 5 of the Imports and Exports (Control) Act, 1947. On going through the allegations contained in the charge-sheet, we have not even the slightest hesitation in coming to the conclusion that those allegations disclose primarily and essentially an offence squarely and fully falling within the ambit of section 5 of the Imports and Exports (Control) Act, 1947. Under the mandatory provisions contained in section 6 of the said Act, no Court shall take cognizance of any such offence except upon a complaint in writing made by an officer authorised in this behalf by the Central Government by a general or special order. The officer authorised by the Central Government in his behalf is the Chief Controller of Imports and Exports and it is not disputed that this officer specially empowered by the Central Government has not so far chosen to prosecute the petitioners by filing a complaint in writing against them. No complaint in writing having been made by the officer authorised in this behalf by the Central Government, section 6 of the Imports and Exports (Control) Act, 1947, debars any .Court from taking cognizance of the offence which falls u/s 5 of the said Act. When the allegations in the charge-sheet disclose primarily and essentially an offence for which a complaint in writing by such an officer specially empowered by the Central Government is necessary, the mandatory provisions of section 6 cannot be permitted to be avoided or circumvented by seeking to prosecute the petitioners merely for the offence of conspiracy as is being tried to be done in the present case. In Bajaji Appaji Kote v. Emperor A I R 1946 Bom. 7=47 Bom. L R 664, this Court has observed (p. 12):

...It is a well established principle that a prosecution for a lesser offence should not be launched when the facts alleged constitute a graver offence. In several cases like Emperor v. Prag Datt (1928) I L R 51 AH 382 and Dholliah v. King Emperor (1931) I L R 54 Mad. 1018), it has been definitely laid down after a review of the case law on the subject, that if the graver offence is disclosed from the facts stated in a complaint the condition laid down u/s 195 (1) (b) for taking cognisance of such a case cannot be evaded by electing to name the offence under another section which is more General and less grave.

We respectfully agree with this view. It would be highly improper to allow such a device to be used to defeat the statutory provisions of section 195 of the Code of Criminal Procedure.

We may also refer to an English decision which is on all fours. In Rex v. Barnett (1951) 2KB 425, a number of persons alleged to be dealers in scrap metal were charged on a count of an indictment which alleged that They conspired together and with other persons unknown to contravene the provisions of section 1 of the Auctions (Bidding Agreements) Act, 1927, by, being dealers, agreeing to offer and accept consideration as an inducement or reward for abstaining from bidding at sales by auction". It was held that the principle that, where a statute made unlawful what was lawful before and appointed a specific remedy that remedy and no other must be pursued, applied, Not withstanding that a conspiracy was alleged, for the particulars alleged of that conspiracy described substantially in terms offences which the Act of 1927 created ; and that the count was therefore bad in law.

In the present case also the allegations in the charge-sheet clearly discloses an offence which falls squarely and fully u/s 5 of the Imports and Exports (Control) Act, 1947. and the learned Magistrate was therefore in error in taking cognizance of the alleged offences without a complaint in writing by an officer authorised in this behalf by the Central Government. It is for the Magistrate to see what offence is disclosed from the allegations in the charge-sheet and it is not open to the prosecution to contend that they seek to prosecute the petitioners merely for a lesser offence, for which no such complaint in writing is necessary, by the officer authorised by the Central Government. It is clear to our mind that by doing so the prosecution is obviously trying to evade and circumvent the mandatory provisions contained in section 6 of the Imports and Exports (Control) Act, 1947. In the charge-sheet the prosecution have not only alleged that the petitioners had entered into a conspiracy to dispose of the imported goods in comprehension of the conditions of the licenses, but they have also further alleged that in pursuance of that conspiracy the petitioners had actually disposed of all the imported goods to different parties under as many as thirty eight invoices and they had thus committed "breach of the conditions of the licenses granted to them under the Imports and Exports (Control) Act, 1947". When they have thus made allegations not merely of conspiracy, but also that in pursuance of the said conspiracy the petitioners had contravened the conditions of the licenses granted to them by disposing of the imported goods to different persons, the charge to be framed against them should be not only in respect of the alleged conspiracy, but also in respect of the other offences which are said to have flown out of the conspiracy. In The State of Andhra Pradesh Vs. Kandimalla Subbaiah and Another, . the Supreme Court has observed that if the alleged offences are said to have flown out of the conspiracy the appropriate form of charge would be a specific charge in respect of each of those offences along with the charge of conspiracy.

In the above view of the position of law, the learned Magistrate was clearly in error in rejecting the petitioner''s application dated April 21, 1971. For want of a complaint in writing made by an officer specially empowered in that behalf by the Central Government, cognizance of the offences alleged in the charge-sheet could not be taken by the learned Magistrate and he should have therefore terminated the proceedings and discharged the petitioners.

The revision application is, therefore, allowed. The proceedings in Criminal Case No. 351/P of 1970 pending before the learned Additional Chief Presidency Magistrate, 32nd Court, Esplanade, Bombay, are hereby terminated and the petitioners are discharged. The rule is made absolute.