Nitya Nand Chaubey vs State of U.P.

Om Prakash-VII, J.—This is the bail application on behalf of the applicant praying for release of the applicant on bail in connection with case Crime No. NIL of 2016 under Section 135 of the Customs Act, 1962, P.S. Customs, District Varanasi.

Heard Shri Dilip Kumar, learned counsel for the applicant and Shri Sanjay Kumar Singh, learned counsel for the opposite party No. 2 - Customs Department as well as the learned AGA appearing for the State at length and perused the entire record.

It is submitted by the learned counsel for the applicant that the applicant was working as agent of the franchisee of the Ambey Forex Private Limited (in short ''the AFPL'') dealing with sale and purchase of foreign currency. It is further submitted that the AFPL contains 17 branches at different States/Cities of India, out of which one is situated at Varanasi. The Varanasi Branch has its three franchisees, namely, M/s. Ghulam Rasool Travels, Lalganj, Azamgarh, M/s. Goodluck Enterprizes, Mohul, Azamgarh and M/s. Chaurasiya Krishi Bhandar, Rani ki Sarai, Azamgarh. On the day of the incident, the applicant along with two others were intercepted by the local Police at Azamgarh. During interception, Indian currency and foreign currency were found from the possession of the accused. It is submitted that the foreign currencies, said to have been recovered from the vehicle in question, were belonging to AFPL, which were collected by the applicant for depositing the same in H.D.F.C. Bank. It is further submitted that the said currencies were purchased from Obeda Khan, Irfan and Laeek. It is further submitted that as per the appointment made by the company, the applicant has authority to purchase the foreign currency on behalf of the AFPL. It is further submitted that on the next date of the detention, the applicant was released by the department but on several occasions, without disclosing reasons, he was summoned and interrogated and incorrect statement was recorded under pressure. It is further submitted that neither the currencies, said to have been recovered from the applicant, comes under the definition of the prohibited goods nor there is any violation of the Customs Act or Foreign Exchange Management Act (in short the ''FEMA''). Learned counsel for the applicant at this stage referred to the provisions of Sections 2, 11, 11A, 104, 110, 111, 132 and 135 of the Customs Act and also the relevant provisions of the FEMA. It is further submitted that there was no requirement to obtain fresh sanction of the Reserve Bank of India to appoint franchisee as the formalities required under the guidelines laid down by the R.B.I. have been fulfilled and information has been given, hence, the possession of the foreign currencies, said to have been recovered from the applicant, was not illegal or in violation of any Circular, Notification, etc., of the Central Government. It is further submitted that the applicant''s case neither comes under the purview of Section 11 nor under Section 132 of the Customs Act. Submission is that if the prosecution case, as a whole, is taken as true, then also maximum punishment for the offence under Section 132 of Customs Act is of two years. The entire proceeding adopted by the department is against the provisions of law. Arrest of the applicant is also illegal. Time-to-time during interrogation before arrest the applicant had requested the department for information about the illegality said to have been committed by the applicant but no information has been given by the department. The order passed by the court below rejecting the bail application of the applicant is illegal and without application of judicial mind. In conclusion, it is urged that a prima facie case has been made out for grant of bail inasmuch as the arrest of the applicant is itself bad in law. Hence, under the circumstances, the application may be allowed by granting bail as prayed for. In support of his submissions, learned counsel for the applicant placed reliance on the decision of the Delhi High Court in Prem Kumar v. Customs, Crl. M.C. No. 1990 of 2010, decided on 8-2-2016 [2016 (334) E.L.T. 498 (Del.)].

On the other hand, learned counsel for the opposite party No. 2 - department as well as the learned AGA vehemently opposing the prayer for bail submitted that it is a case of smuggling of the currencies under the umbrella of AFPL. Letter regarding appointment of franchisee has no legal sanctity as it was not issued by the Reserve Bank of India. It is mere an authority issued by the AFPL. The applicant was not authorised to purchase the foreign currencies on behalf of the AFPL. It is further submitted that the applicant has not given details of the person from whom the said foreign currencies, recovered from the possession of the applicant, were purchased. The said Obeda Khan, Irfan and Laeek have denied of any such transaction. Further, the said foreign currencies comes under the definition of ''goods'' as defined under Section 2(22) of the Customs Act under the category of prohibited goods. Illegal import of the foreign currency is prohibited. Investigation in the matter is going on. It is next submitted that applicant''s case comes under the purview of Section 135 of the Customs Act and maximum punishment for the offence levelled against the applicant is of seven years and the same is cognisable and non-bailable offence. Neither possession of the said currencies have been denied by the applicant nor the applicant was able to show any authorization to possess the same or any sanction order of the R.B.I. or details of the purchase of the said currencies. The applicant is involved in smuggling of foreign currencies which hampers the Indian economy also. Learned counsel for the opposite party No. 2 placed reliance on the decision of the Apex Court in the case of Naresh J. Sukhawani v. Union of India, (1996) SCC (Cri) 76 : 1996 (83) E.L.T. 258 (S.C.).

I have considered the rival submissions made by the learned counsel for the parties and have gone through the entire record including the case laws cited by the learned counsel for the parties.

In the case in hand, possession of the aforesaid foreign currencies have not been denied by the applicant. Appointment of franchisee has not been made by the order of the Reserve Bank of India. There is only authorization letter issued by the AFPL. Hence, keeping in view the nature of the offence, evidence, complicity of the accused, severity of punishment, submissions of the learned counsel for the parties, the stand taken by Obeda Khan, Irfan and Laeek, the provisions of the Customs Act and FEMA, no case is made out for bail. The application fails and is, accordingly, rejected. It is, however, clarified that any observation made in this order is a prima facie observation made only for the purpose of deciding the bail application and the same shall have no bearing on the merits of the case at the time of trial which has to be adjudicated on the basis of the evidence that may be led by the respective parties. The concerned Court, during the course of trial, shall not refer to nor shall it in any manner be influenced by any observation made in this order.