Case: State of Maharashtra Vs. Nainmal Punjaji Shah & Another

Sikri, J.1. By order, dated July 21, 1969, the Chief Presidency Magistrate, Bombay, allowed bail to Nainmal Punjaji Shah and Champalal Punjaji Shah, respondents before us. The State of Maharashtra filed a revision petition before the High Court. The High Court modified the order in certain respects. Against that order, after obtaining special leave, the State of Maharashtra has appealed.2. The question before us is whether on the facts and circumstances of the case the order of the High Court should be maintained or modified in any manner. Ordinarily this Court does not go into these questions but, as will be presently seen the facts in this case are extraordinary and this Court felt that the matter should be looked into by it.3. The relevant facts leading to the order of the High Court may be set out in brief. On April 13, 1969, in pursuance of information received, business premises of M/s. Shah Nainmal Champalal & Co. at 61, Krishna Niketan, 3rd Floor, Motta Mandir compound, were searched. Nainmal Punjaji Shah, who was a partner of the firm, was present and three silver bars were found in the premises. Incriminating documents were found concealed in a ledge outside a window of a room in the premises. 71 bars of silver were found in the godown of the firm which was in the ground floor of the building. A cursory scrutiny of the documents seized revealed, according to the prosecution, that the said Nainmal Punjaji Shah, with several others, was concerned in illegal transactions in foreign wrist watches, textiles, Metalic yarn, gold, etc., and these transactions ran into about Rs. 100 crores.4. On April 14, 1969, Nainmal Punjaji Shah was arrested. It is alleged by the prosecution that on that day Nainmal offered bribe to one Somers of Revenue Intelligence. This fact was, however, not mentioned in the application for remand filed on April 14, 1969. On this day the Additional Chief Presidency Magistrate remanded Nainmal to custody till April 28, 1969. On April 22, 1969, Nainmal applied for bail. This application was rejected by the Additional Chief Presidency Magistrate that very day.5. In the meantime Somers is alleged to have reported the offer of bribe to the Deputy Collector who sent the report to the Director of Revenue Intelligence whose head-office is in Delhi. On April 17, 1969, the Director is alleged to have made an endorsement. On April 25, 1969, one Chandrakant Joshi is alleged to have made a statement regarding the offer of bribe.6. We may state that Mr. Chari objects to the alleged statement of April 25, 1969, being taken into consideration.7. On April 27, 1969, statements were recorded of various Customs Officers regarding this offer or bribe. According to the prosecution attempt was made on behalf of the respondent to fabricate evidence at this stage. The landlord of the office building was induced to issue a notice pre-dated April 9, 1969, taking objection to their certain heavy packages in their above office. This was done in order to establish that Nainmal had no option except to store 71 bars in the godown. We may mention that according to the declaration given under the Customs (Amendment) Ordinance (1 of 1969), the godown had not been declared as a storing place of silver.8. On April 28, 1969, the prosecution prayed for further remand to custody of Nainmal and Nainmal filed another application for bail. The Additional Chief Presidency Magistrate, on the same day remanded Nainmal to custody.9. On May 5/6, 1969 Nainmal applied again for bail. This was rejected on May 6, 1969. At this stage one letter from one K. S. Nathi was received by the Deputy Director of Revenue Intelligence giving information that Nainmal would abscond. We may discard this letter from further consideration because the identity of K. S. Nathi has not been established yet.10. On May 12, 1969, another remand application was made. On this, however, Mr. Dhruv, Acting Chief Presidency Magistrate granted bail to Nainmal of Rs. 15 lakhs, but this order was not to be effective till May 21, 1969.11. On May 17, 1969, the investigating agency was able to locate some other alleged co-conspirators, namely, Ghamandiram K. Gowani (his name is alleged to exist in the Exercise Book), Phulchand Bastimal and Balkrishna. They were arrested on May 17, 1960.12. The State filed a revision application to the High Court against the order granting bail to Nainmal. In this application it was pointed out that Champalal, respondent before us, was in hiding and was avoiding apprehension. On May 20, 1969, Ghamandiram and Phulchand were directed to be released on bail by Mr. Dhruv, Acting Chief Presidency Magistrate. A revision application was also filed by the State before the High Court. On May 22, 1969, the High Court dealt with the matter. Bhole, J., set aside the order of bail and remanded Nainmal to custody. He came to the conclusion that at that stage of the investigations the respondent Nainmal should be detained. The revision petition as regards Ghamandiram and Phulchand also succeeded.13. On June 6, 1969, one alleged co-conspirator, J. G. Kothari, was arrested. On this day another remand application was made, and Nainmal was remanded to custody till June 20, 1969.14. Another relevant fact on which the prosecution relied has relation with one Gopal Shivalkar. On April 9, 1969, 10, 054 watches were seized by the V. P. Road Police in a room in Fernandez building, Dr. Deshmukh Lane, and Ganpat Gopal Shivalkar was arrested. He was released on bail on April 10, 1969. He failed to be present on June 9, 1969, in Court in connection with the seizure of those watches. Warrants for his arrest were issued but he presented himself before the Presidency Magistrate on June 10, 1969. While he was being taken to point out his native place in pursuance of Courts order he absconded. It is the case of the prosecution that he absconded because he had been induced to do so by the respondents. We may mention that he was apprehended on July 3, 1969, and in his statement he is supposed to have divulged to the investigating agency the reasons for his intentional escape.15. On June 11, 1969, Champalal presented himself before the deputy Director, Revenue Intelligence. On June 12, 1969, his Advocate wrote a letter protesting against the statement made before the Court of the Chief Presidency Magistrate when Nainmals application for bail was being heard that Champalal had absconded and it was difficult to trace him. It was stated that if the investigating agency genuinely believed that he was absconding and it was difficult to trace him it was not understood whey he was allowed to go home on June 11, 1969 when he presented himself before the Deputy Director, Revenue Intelligence.16. Champalal was interrogated on June 12, 1969. On June 16, 1969, he was arrested. The next day he was produced before the Chief Presidency Magistrate and remanded to custody till July 1, 1969.17. Nainmal was again remanded to custody till July 4, 1966. Nainmal and Champalal continued to be remanded till the last remand application filed by the Deputy Director of Revenue Intelligence on July 18, 1969. It is at this stage that the Chief Presidency Magistrate felt that both Nainmal and Champalal should be released on bail. The Chief presidency Magistrate after going through the remand application and the investigation record found that no further progress had been made and no fresh clue obtained and that the investigation that remained to be done could be carried on without the continuance of the accused in custody. He further felt that the investigation of the case might take two to three years and it was impossible to keep the respondents indefinitely in custody. The Customs urged additional grounds for keeping the respondents in custody. The first ground was that Nainmal had offered the bribe of Rs. 2-3 lakhs to Customs Officer Somers, and secondly, that with his financial resources he could play havoc with the witnesses by offering bribe and thus prevent a fair and proper trial. The Chief Presidency Magistrate felt that the alleged financial resources could be utilised even by the respondents relations and friends and this was not a good ground for keeping them in custody. Another ground which was urged was that the respondents were likely to abscond. It was suggested that it would be tempting for Nainmal to abscond because he would thus avoid various liabilities in respect of income tax, wealth tax and sales tax and he had ample resources abroad to live comfortably. The Chief presidency Magistrate felt that even if these liabilities be taken to exist the respondent Nainmal would have left the country sometime ago as there were some custom cases pending against him even before. We may mention at this stage that this has reference to the cases arising out of the following seizures. The first seizure, dated September 14/15, 1964, was of gold, watches, Indian and foreign currency valued at about Rs. 55 lakhs from the premises belonging to and under the control of the respondents in the building known as "Shakti Sadan" Bombay. The second seizure out of which a complaint was filed against Champalal, Pukhraj Rajaji and Mohan Lal was in respect of seizure of 11, 000 tolas of gold from "Vidhya Vihar" building on May 30/31, 1965. Yet another seizure took place on November 30, 1967, and in this 600 tolas of gold was seized from room No. 8, Block A, Municipal Building, Kamathipura Bombay, and Champalal, respondent, along with one Wagharam Raghunathji and J. G. Kothari were present in the room. The Chief presidency Magistrate, therefore, concluded that there was not such likelihood of the respondents absconding.18. The Chief Presidency Magistrate dismissed the plea that the respondents might fabricate false evidence on the ground that what they were alleged to have done already, i.e. to have induced the landlord to pre-date a notice, was a matter too small to be taken into consideration. The Chief Presidency Magistrate also was not impressed with the Customs case that Gopal Shivalkar had been induced to escape from custody. The Magistrate also felt that it was because of the seriousness of the case that he had found it necessary to detain the accused for such a long time already and he found that the investigations had reached a stage where the continuance of these accused in custody was no longer necessary. Accordingly he ordered that Nainmal should furnish bail in the sums of Rs. 15 lakhs with three sureties of Rs. 5 lakhs each and accused Champalal should furnish bail in the sum of Rs. 5 lakhs with one surety in the like amount or two sureties of Rs. 2, 50, 00/- each. He further adopted the conditions, except with one variation, imposed in Mr. Dhruvs order, dated May 4, 1969. These conditions were :(1) He shall not leave Bombay without the previous permission of the court.(2) He shall surrender his passport, if any, to the Customs Department.(3) He shall attend the Custom House daily at 10 a.m. and would not leave it till permitted by the concerned customs officer.(4) He shall accompany the custom officers, wherever they propose to take him for investigation.(5) He shall also attend the Custom House at any time other than the aforesaid time, if required for the purposes of investigation.(6) If the Customs officer desire to keep a guard to watch the activities of the accused, they are permitted to do so.The Chief Presidency Magistrate varied the time of reporting in the third condition from 10 a.m. to 11 a.m.19. Before the High Court (Gatne, J.) it was urged on behalf of the Customs authorities as follows :Nainmal was one of the principal conspirators in a conspiracy to smuggle prohibited goods including foreign exchange into and out of India and the conspiracy in question had wide ramifications over various places in India and abroad and covered a wide range of commodities like silver, foreign currency and foreign exchange and contraband goods such as watches, nylon and synthetic fabrics, cigarette lighters, etc. The seized documents included accounts of large quantity of watches and of the smuggling out of India of huge amounts of foreign exchange with a view to build up vast assets abroad which could be used for smuggling into India goods which yield a profit of 200 per cent. Those documents further reveal that a gigantic balance of about Rs. 67 crores in foreign exchange was built up by the respondents in the beginning of the year 1969. The documents reveal that between 12-4-1966 to 5-9-1968 on as many as 66 occasions silver of the value of Rs. 7 crores was smuggled out of India in launches and some of the documents reveal that during a single year 1967-68 silver worth about Rs. 1 1/2 crores was exported out of India in pursuance of the aforesaid conspiracy. The statement of foreign accounts shows that in a single month (January 1969) alone amount to the tune of 902, 369, 44 Dollars was credited to his account in foreign currency and at the official rate of exchange it comes to Rs. 67, 67, 77, 080/- in Indian currency..... Investigations have further revealed that in few months 1, 92, 281 watches valued at about Rs. 2/- crores were smuggled into India and 14, 100 wrist watches of the value of Rs. 14 lacs which were seized on 25-4-1969 by the officers of Central Excise Department, Bombay, at Juhu Beach belong to the syndicate or syndicates who operate in conspiracy with Nainmal Punjaji Shah.20. Various other facts were pointed out to the High Court. It was also pointed out to the High Court that the respondents had incurred heavy financial liabilities but the High Court felt that these liabilities had not been irrevocably fixed.21. A new fact was mentioned before the High Court that Nainmal, respondent, had made a donation of Rs. 25 lakhs for relief work in Rajasthan but the High Court felt that it was difficult to say with any reasonable certainty that a donation of Rs. 25 lakhs had in fact been made by Nainmal and that the same had been made out of his own earnings.22. The High Court was, however, impressed by the fact that although the respondents had been released on bail in two other cases which were pending they neither escaped nor attempted to tamper with the evidence on the side of the prosecution in those cases. Gatne, J., concluded on this part of the case thus :"On the materials, as they stand, there is in my opinion, no foundation for the belief that the respondents would in fact leave India and abscond in the event of their being released on bail. Both the respondents are persons having a family and property in India. In fact respondent No. 1 has a wife, who is expecting to deliver in the month of August, 1969".The High Court also repelled the contention of the Customs that the respondents would tamper with the evidence in the case. The High Court also refused to accept the allegation of the Customs that it was the respondents who had induced Gopal Shivalkar to escape from custody.23. The High Court refused to attach any credence to the statement of Pokhraj that his evidence had been attempted to be tempered with. On the whole the High Court was of the view that there was no justification for the apprehension that if the respondents were released on bail they would further indulge in similar activities.24. The High Court then considered whether it was still necessary to detain the respondents in the interest of smooth and efficient investigation of this somewhat extraordinary case. The High Court observed :"Having regard to the nature of the case and the difficulties which must naturally arise in investigation of this kind, it seems to me that there is some justification for Mr. Porus Mehtas contention that it would not be advisable to set the respondents at liberty before at least the crucial stage of the investigation is over. Mr. Porus Mehta has urged that some important investigation still remains to be made and remain to be carried out. Mr. Porus Mehta undertakes to file the complaint against these respondents before the expiry of six months from today. On the other hand, Mr. Peerbhoy points out that enough time was already granted to the prosecution to carry out this important investigation during the past two or three months. That no doubt is true, but some further time is, in my opinion, necessary in the interest of justice and fair play. If the liberty of an individual is important, the necessity of investigations of this kind being carried out in a smooth and efficient manner is equally important".The High Court, therefore, directed as follows :"I would, therefore, direct that this order of confirmation of bail shall operate after the expiry of two months from today. In the meantime, the prosecution would of course have to approach the Magistrate for remand from time to time as required by law. Even after the expiry of two months, it would be open to the learned Chief Presidency Magistrate to consider if the exigencies of investigations or any other important circumstances justify the grant of further remand to these respondents".The High Court raised the amount of bail in the case of respondent Nainmal from 15 lakhs to 20 lakhs and in the case of respondent Champalal from 5 lakhs to 7 1/2 lakhs. The High Court further directed that the other conditions imposed by the learned Chief Presidency Magistrate shall stand in tact. Accordingly subject to the aforesaid modifications the order of bail was confirmed and the revision application dismissed.25. We have heard the learned counsel for the appellant, Mr. Porus Mehta, at length. While we are impressed with the extraordinary nature of the facts of this case and that the investigations should proceed fairly and efficiently, it is impossible to say that no bail should be granted to the respondents during the pendency of the whole of the investigations. It was stated on behalf of the Customs before Gatne, J., that the complaint would be filed within six months from that date. We are of the view that the respondents cannot be detained in custody longer than that period. No material has been shown to us to enable us to differ from the finding of the High Court that on the facts placed before us and before the High Court there is any reasonable apprehension that the respondents would try to leave India. In such matters there must be absolute certainty that he was likely to leave the country before a Court would detain an accused indefinitely during the whole period of the investigation. If this consideration is kept aside, the only other consideration would be the reasonable apprehension that evidence would be tampered with. Here again no material has been placed before us to show that we should come to a finding different from that of the High Court. The third consideration is the larger interest of the State, as pointed out by this Court in State v. Jagjit Singh. We feel that this interest was not adequately kept in view by the High Court and this requires that the respondents should be kept in custody for six months from the date of the order of the High Court dated August 1, 1969. We may mention that the State undertakes not to ask for remand to custody if it is no longer absolutely essential that the respondents be kept in custody. As already stated, the State will continue to apply for remand and if some facts which we have not taken into consideration or anticipated come to light the Chief Presidency Magistrate would be entitled to forward to us his recommendations that the order we have made should be modified in any respect.

Decision reasoning: 0[ds]2. The question before us is whether on the facts and circumstances of the case the order of the High Court should be maintained or modified in any manner.Ordinarily this Court does not go into these questions but, as will be presently seen the facts in this case are extraordinary and this Court felt that the matter should be looked into by it.We have heard the learned counsel for the appellant, Mr. Porus Mehta, at length. While we are impressed with the extraordinary nature of the facts of this case and that the investigations should proceed fairly and efficiently, it is impossible to say that no bail should be granted to the respondents during the pendency of the whole of the investigations. It was stated on behalf of the Customs before Gatne, J., that the complaint would be filed within six months from that date. We are of the view that the respondents cannot be detained in custody longer than that period. No material has been shown to us to enable us to differ from the finding of the High Court that on the facts placed before us and before the High Court there is any reasonable apprehension that the respondents would try to leave India. In such matters there must be absolute certainty that he was likely to leave the country before a Court would detain an accused indefinitely during the whole period of the investigation. If this consideration is kept aside, the only other consideration would be the reasonable apprehension that evidence would be tampered with. Here again no material has been placed before us to show that we should come to a finding different from that of the High Court. The third consideration is the larger interest of the State, as pointed out by this Court in State v. Jagjit Singh. We feel that this interest was not adequately kept in view by the High Court and this requires that the respondents should be kept in custody for six months from the date of the order of the High Court dated August 1, 1969. We may mention that the State undertakes not to ask for remand to custody if it is no longer absolutely essential that the respondents be kept in custody. As already stated, the State will continue to apply for remand and if some facts which we have not taken into consideration or anticipated come to light the Chief Presidency Magistrate would be entitled to forward to us his recommendations that the order we have made should be modified in any respect.