Petitions for Special Leave to Appeal Criminal Nos 1090 91 of 1989
From the Judgment and Order dated 851989 of the Delhi High Court in Misc
Appln
No 10689  1071989
UR Lalit Tushar Shah and B V
Desai for the Petitioners
JS Arora and Satish Agarwala for the Respondent
After filing of the charge sheet the High Court ordered their re arrest by cancelling the bail
The order of 379 the High Court is now under challenge
I do not find any merit in these petitions
But before dismissing I wish however to draw attention to some aspects of the question raised
The facts On 23 March 1988 the petitioners were arrested in Bombay by officers of the Narcotic Control Bureau
They were ordered to be produced before the competent Magistrate at New Delhi
They were accordingly produced before the Addi tional Chief Metropolitan Magistrate New Delhi
On 29 March 1988 they were remanded to jail custody till 12 April 1988
The remand order was subsequently renewed from time to time
On 10 May 1988 the petitioners moved the Chief Metropolitan Magistrate for bail
When that petition was pending consideration the prosecution submitted charge sheet
The charge sheet was filed on 23 June 1988 for offences under Sections 21 23 and 29 of the 
On July 22 1988 the petitioners filed an application for bail under Section 1672 Cr
PC on the ground that the charge sheet was filed after the expiry of 90 days of their arrest
On 29 July 1988 learned Magistrate enlarged them on bail on their furnishing self bonds in the sum of Rupees two lakhs each with two surety bonds in the sum of Rs 1 lakh each
The efforts of the prosecution to have the bail can celled could not succeed before learned Magistrate
So they moved the Delhi High Court under Section 4392 read with section 482 of the Cr
In that application the nature of the offence committed the part played by the accused the gravity of the offence etc were all set out
1t was also stated that since two of the accused were earlier absconding the investigation in the case could not be completed within the time frame
The High Court by following the decision of this Court in Raghubir Singh vs State of Bihar  and after considering the material on record cancelled the bail order
The High Court said In the present cases no doubt an order was passed granting bail because the charge sheet was not filed within the statutory period of 90 days but it was filed on 92 days
380 There is no doubt that the charge against the respondents is very serious in nature because they are alleged to have entered into a con spiracy to export heroin out of India
The minimum punishment prescribed in such offence is a sentence of 10 years rigorous imprison ment and a fine of Rupees one lakh
I am therefore of the view that the authority re ferred above is fully applicable to the facts of the present case
Respondents are further alleged to have procured services of one HS Gala and a lady carrier Manjula Ben who car ried 3 Kg
heroin from India to USA in Novem ber 1987
Therefore it was on the basis of the statements made by those persons in USA that the respondents were arrested in India
I am therefore of the view that it is a fit case where order of bail should be cancelled
 The question is whether the discretion exercised by the High Court is legally sustainable Whether the accused have a special right to remain on bail merely because they have been enlarged under proviso a to Section 1672 of the Code It is not disputed and indeed cannot be disputed that when an accused is granted bail whether under proviso a to Section 1672 or under the general provisions of Chapter XXXIII the only method by which the bail may be cancelled is to proceed under Section 4375 or Section 4392
That is because the person released on bail under the proviso to Section 1672 shall be deemed to be so released under the provisions of Chapter XXXIII of the Code
Sub section 5 of Section 437 provides Any Court which has released a person on bail under sub section 1 or sub section 2 may if it considers it necessary so to do direct that such person be arrested and commit him to custody Sub section 2 of Section 439 provides A High Court or Court of Session may direct that any person who has been released on bail under this Chapter be arrested and commit him to custody 381 Under sub section 5 of Section 437 the Court if it considers it necessary direct that the person on bail be arrested and committed to custody
The bail may be cancelled by the Court if it comes to the conclusion that there are sufficient grounds that the accused has committed a non bailable offence and that it is necessary that he should be arrested and committed to custody
This is what this Court observed in Raghubir Singh vs State of Bihar  It was said at 826 Where bail has been granted under the proviso to section 1672 for the default of the prosecution in not completing the investiga tion in sixty days after the defect is cured by the filing of a charge sheet the prosecu tion may seek to have the bail cancelled on the ground that the accused has committed a non bailable offence and that it is necessary to arrest him and commit him to custody
In the last mentioned case one would expect very strong grounds indeed And said The order for release on bail was not an order on merits but was what one may call an order on default and order that could be rectified for special reasons after the defect was cured
 An order for release on bail under proviso a to Sec tion 1672 may appropriately be termed as an order on default
Indeed it is a release on bail on the default of the prosecution in filing charge sheet within the prescribed period
The right to bail under Section 1672 proviso a thereto is absolute
It is a legislative command and not Court s discretion
If the investigating agency fails to file charge sheet before the expiry of 9060 days as the case may be the accused in custody should he released on bail
But at that stage merits of the case are not to be examined
Not at all
In fact the Magistrate has no power to remand a person beyond the stipulated period of 9060 days
He must pass an order of bail and communicate the same to the accused to furnish the requisite bail bonds
The accused cannot therefore claim any special right to remain on bail
If the investigation reveals that the accused has committed a serious offence and charge sheet is filed the bail granted under proviso a to Section 1672 could be cancelled
382 I examined the material on record
The offences alleged are of serious nature
I am of the opinion that the discre tion exercised by the High Court does not call for any interference
The Petitions are therefore rejected
NPV Petitions dis missed


Summary:
The appellant company was carrying on business as a bullion merchant and in that capacity purchased about 9478 tolas of gold
On information that the gold in question was smuggled the customs authorities issued a notice to the appellant to the effect that the case had been placed before the Collector of Customs for adjudication by the Superintendent Preventive Service The notice stated inter alia   You are requested to show cause  why penal action should not be taken against you and the 947819 tolas of gold in question under the provisions of sections 1678 and 168 of the  for alleged violation of section 19 of the same Act read with section 8 of the Foreign Exchange Regulation Act 1947 
The Collector of Customs after hearing the parties came to the conclusion that the gold in question was smuggled gold and that there was a contravention of the provisions of section 19 of the read with section 8 of the Foreign Exchange Regulation Act and made an order in these terms  I accordingly order that the entire quantity of the gold seized on the 21st November 1950 amounting to 947819 tolas be confiscated under section 1678 of the 
In lieu of confiscation however I give the owner of the said gold an option under section 183 ibid to pay a fine of Rs 1000000 Rupees ten lakhs only in addition to the proper customs duty and other charge leviable thereon within four months from the date of the despatch of this order
The release of the gold will be further subject to the production of a permit from the Reserve Bank of India within the aforesaid period 
The appellant challenged the validity of the order and contended i that on a proper construction of section 83 of the Foreign Exchange Regulation Act read with section 19 of the  it was not legally open to the customs authorities to take any action against it under the  as such action would prejudice the provisions of section 23 of the Foreign Exchange Regulation Act and 2 that in any case the conditions which the Collector of Customs had imposed in the impugned order for release of the confiscated gold were not warranted by the statute 822 and that as the order was a composite and integrated one it was not severable and therefore should be quashed  Held 1 that the scope of section 1678 of the  is different from that of section 23 Of the Foreign Exchange Regulation Act 1947
Whereas under section 23 Of the Foreign Exchange Regulation Act proceedings are taken in Personam against the offender for the purpose of penalising him for the contravention of the provisions of the Act an order for confiscation of the smuggled goods under section 1678 Of the is one in rem
There is a difference between the expression  any person concerned in any such offence  occurring in the third column of section 1678 of the and the expression whoever contravenes any of the provisions of this Act  occurring in section 23 of the Foreign Exchange Regulation Act
A person may be concerned in the importation of smuggled goods without being a smuggler himself or without himself contravening any of the provisions of the Foreign Exchange Regulation Act
In this case the only penalty imposed under section 1678 Of the was confiscation of the gold which indicated that the customs authorities had dropped the proceedings in personam consequently the adoption of the procedure under the did not prejudice in any manner the provisions Of section 23 Of the Foreign Exchange Regulation Act
The question whether two remedies are available to the authorities concerned in respect of a contravention which comes both under the and the Foreign Exchange Act was left open
2 The Collector of Customs had no jurisdiction to impose the two conditions for the release of the confiscated gold  but as the aforesaid conditions are severable from the rest of the impugned order the latter is valid as to the confiscation of the gold and the payment of fine in lieu thereof
R M D Chamarbaugwalla vs Union of India 1957 SCR 930 and Shri Ram Krishna
Dalmia vs Shri justice section R Tendolkar and others   applied
The relevant sections of the  and the Foreign Exchange Regulation Act 1947 are set out in the judgment