Case: Ashok Metal Corporation Vs. The Senior Inspector of Police and Others

2. The facts show that onat about 9.40 p.m. the police of aforesaid police station received information that one person occupying berth No.39 of CoachIII tire AC of train proceeding to Mumbai was carrying huge quantity of gold and arms. The train arrived at Bhusawal at 10.05 p.m. One Devang Shah was occupying this berth. After seeing police he attempted to run away but he was over powered and held by police. When search of his person and his belonging was taken, police noticed that he was wearing a jacket inside of the shirt and in the pockets of the jacket there were 8 gold bars of one kilogram each in concealed condition. These bars were seized under seizure panchanama in the presence of independent panch witnesses and Devang came to be arrested. Devang could not explain about source of the gold. There were marking showing that most of the bars were of foreign origin and on the bars there were no serial numbers which ordinarily refinery gives. The value of the bars was around Rs.2.8 crore. One A.P.I. who participated in this action gave FIR and the aforesaid crime came to be registered.3. During the course of investigation of the aforesaid crime police collected certificate of purity of the gold and it is 99.5%. Out of 8 bars on 4 bars there were marking asHowever there were no serial number given by the refinery. On the two bars there was marking asOne bar there was marking asThe marking and the name of refinery on the bars indicate that these four bars were manufactured in refinery situated outside India, in the country such as Switzerland and Arab Emirates.5. The petitioner Ashok Metal Corporation of which one Kishorimal Jain is the sole proprietor has contended that it had purchased 15 kilograms of gold onfrom Dealer "Edelweiss". This company is situated in Ahmadabad, Gujarat and it is purportedly having licence of import of gold. The petitioner has produced two vouchers of this company and they show that four gold bars were purchased by the petitioner from this company. Total weight of gold was around 15 kilograms. It is the case of the petitioner that it is manufacturing jewelery. It is the case of the petitioner that it had sent Devang to Kolkata with this gold for preparation of ornaments, jewelery but the negotiations regarding charges of preparation failed and so the petitioner had asked Devang to return with gold to Mumbai. Devang was intercepted at Bhusawal and it is the case of the petitioner that this gold was purchased by the petitioner from Edelweiss company onIt appears that application was also given under section 457 of the Code of Criminal Procedure by the petitioner in the Court of the Judicial Magistrate, First Class. This application was opposed by both the police and the Customs Department.6. In the petition, the petitioner has not supplied particulars of serial number of the gold bars purchased from the aforesaid company. From one voucher it can be said that 5 gold bars of "Perth Mint" having serial numbers 2626401 to 2626405 were sold by the aforesaid company to the petitioner. On not a single bar seized in the present matter name of this refinery or its number is given.7. The Customs Department has collected information fromIndia Pvt. Ltd. The information supplied by the refinery shows that the refinery has unique identity bearing serial number. A typical photo of the finished product is supplied by this company. Similar information is collected by Customs Department from the aforesaid two foreign refineries. In the present case there were no serial numbers appearing on 4 bars on which there was marking asOn the remaining four bars there was name of refinery of foreign origin but the serial number was found erased. Thus, description of none of the 8 gold bars tallies with the description given in the vouchers produced by the petitioner. This gold was delivered to the petitioner in Mumbai as per the case of the petitioner.

Court's reasoning:
18. The learned counsel for the petitioner made submissions that notice as provided under the Customs Act needs to be given within six months from the date of seizure and after such period the petitioner will be entitled to get the custody in ordinary course if the notice is not given.Relevant material is already quoted by this Court and it shows that the seizure from the employee of present petitioner is made by police under the provision of the Code and seizure is not made under the provisions of the Customs Act. There is power given to Customs Officer to make investigation of such case irrespective of the registration of the crime and filing of the case for offence punishable under section 124 of the Maharashtra Police Act and that has nothing to do with the limitation of six months to issue notice for confiscation. Even if it is presumed that the presumption provided under section 123 of the Customs Act cannot be used, the other provisions are there empowering the Customs Officer to make investigation and file the case. Further the provisions of Cr.P.C. and the Customs Act can be used for confiscation of such gold.19. The term "reason to believe" is used in section 124 of the Maharashtra Police Act and also in section 110 of the Customs Act. At present there is material of aforesaid nature against the petitioner and the explanation given by the petitioner is not at all plausible. In view of these circumstances this Court holds that at this stage it is not possible to give custody of the gold to the petitioner. Further it cannot be said that the arrest of Devang was illegal and the Customs Officers need to be prevented from making investigation or taking steps for confiscation. In the case reported as AIR 1975 SC 160 (Champaklal Ganeshmal v. State of Maharashtra) provision of Section 124 of the Bombay Police Act, now Maharashtra Police Act, is discussed. Following observations are made by the Honble Apex Court in para 7 of the. . . It can hardly be disputed that when anything is imported into the country clandestinely in violation of import or customs regulations it is fraudulently obtained, that is obtained by committing a fraud on the regulations. Smuggled goods are clearly goods fraudulently obtained. .... The plain language of the section stops short at describing the property as "stolen property or property fraudulently obtained" and does not go on to add the words "by him". . . . if the property were stolen or fraudulently obtained by the accused, that would be a distinct and independent offence under the Indian Penal Code or the Customs Act, . . . and it would not be necessary to make it an offence over again under Section 124 of the Bombay Police Act. . . . If the property is capable of being described as "stolen property" or "property fraudulently obtained" by whomsoever it might have been stolen or fraudulently obtained that would be sufficient to comply with the requirements of the section. . . . it is the possession by the accused of property which bears the attribute or characteristic of stolen property or property fraudulently obtained, that is made penal. . . . the explanation given by the appellant for his possession of the wrist watched was unsatisfactory and the High Court was right in taking the view that the appellant had failed to account for the possession of wrist watches to the satisfaction of the Court. "20. Case is already filed under section 124 of the Act against Devang and so this Court holds that the observations made by the Apex Court can be used against Devang if he fails to explain the things.