[Gold Smuggling] Cumulative Value Of Illegal Import By Persons With Common Intention To Determine Whether Offence Bailable: Kerala High Court

The Kerala High Court on Tuesday declared that where gold that is imported illegally, is carried by different persons, all of whom had the common intention, the acts of such persons collectively can be treated as an act done by each person individually. It was thus held that the cumulative value of the goods could then be ascertained to determine whether the offence is bailable or non-bailable. 

The Single Judge Bench of Justice Bechu Kurian Thomas took note that under the erstwhile Customs Act, 1952 (hereinafter, 'Act, 1952'), all offences under the Act were bailable, as clearly stipulated under Section 104(6) of the statute.

However, the Court noted that after the enactment of the Finance Act, 2013, the said provision was amended, and Section 104(6)(c) presently states that, if good have been imported without declaration in accordance with the provisions of the Act, if the value of goods exceeds one crore of rupees, the offence would be non-bailable. 

"Smuggling of gold has a deleterious effect on the country's economy. Curbing the menace of smuggling is essential for the economic progress of the country. The cut-off value fixed through the amendment of 2013 for the purpose of treating the conduct of illegal import or export above that value as a non-bailable offence is with an avowed purpose. Hence while dealing with innovative attempts to override the rigour of statutory prescriptions, courts cannot be oblivious to the amendment and the statutory intent behind such changes in the law," the Court observed in this regard. 

The Court in this case was considering the bail applications of a married couple from whom 1977.18 gms in toto was recovered, amounting to a total of Rs.1,20,90,456/- in the domestic market. The petitioners were intercepted and recovery was made, pursuant to an information received by the Air Intelligence Unit of the Air Customs, International Airport, Calicut, that one Amjad Mihran was indulging in smuggling of gold into India using carriers, including family members. The said Mirhan was arrayed as the first accused in the crime, while the petitioners husband and wife were arrayed as the second and third accused persons respectively. 

It was contended on behalf of the petitioners that the offences under the Act are generally bailable, except those that are specified as non-bailable. It was submitted in this regard that the quantity of gold seized individually from petitioners 1 and 2 alone can be reckoned and hence, the offence alleged against them is bailable. It was added that the second petitioner is a lady and the couple had four children, of which the youngest is only four years and the presence of the parents at home is thus, indispensable. 

The Standing Counsel for the Customs Department Sreelal N. Warriar on the other hand argued that the offences under Section 135 of the Act are non-bailable if the market price of the goods that are imported illegally is above Rupees One Crore and that the petitioners, being husband and wife, had together imported gold worth more than Rupees One Crore and the offence could therefore not be treated as bailable. The counsel submitted that the petitioners had admitted their role in smuggling gold and that they had done it as per the direction of the first petitioner's cousin, the first accused person Mirhan. It was added that the petitioners were part of a smuggling gang involving high volume of gold using family passengers as carriers to evade serious offences and that considering the gravity of the offence, attempts to overcome the rigour of the statutory provisions ought to be discarded.

The Court in this case perused Section 135 of the Act, 1952, which stipulates 'Evasion of duty or provisions' and Section 104 which provides for the 'Power to Arrest'. 

"A perusal of the above statutory provisions make it abundantly clear that if the goods, which have been misdeclared or its duty evaded or imported illegally, have a market price of more than One Crore of rupees, the offence becomes non-bailable," the Court observed. 

The Court noted that individually, the first petitioner was found in possession of 950 gms of 24-carat gold, while the second petitioner was found to possess 1198 gms of 24-carat gold, which collectively amounted to more than Rs.1.20 Crores while individually, the value of the gold recovered would be less than Rs. 1 Crore. 

The Court noted that the contention of the respondent that smugglers were now utilizing family members as carriers to transfer gold of high value, by splitting the gold into quantities which would fall less than the value of Rupees One Crore could not be brushed aside as insignificant. 

"If the quantity of gold illegally imported was split into different parts and carried by different persons, all of whom had the common intention, then the acts done by such persons collectively can be treated as an act done by each person individually. Such an approach is necessary, especially when a common thread, such as that of a family, runs through those body of persons, apart from the common intention that binds them together. Since during import, the goods were allegedly split into different parts but carried by family members, all of whom had presumably a common intention, the cumulative value of the goods can be taken for identifying whether the goods were of a value higher than the cut-off value prescribed," the Court emphasized.

It thus laid down that the collection of such persons would have to be treated as referring to 'any person' as contemplated under Section 135 of the Act, 1952. It thus determined that the petitioners were carrying gold individually worth more than Rs.1.20 Crores, and the offence alleged against them would thus be non-bailable. 

However, taking into consideration that the second petitioner is a lady, and that the couple had four young children, the Court was of the opinion that the further detention of the second petitioner was not necessary.

As regards the first petitioner, however, the Court observed:

"...though the investigation has proceeded significantly, he is stated to be not cooperating. The first petitioner is the person who allegedly induced the second petitioner also to act as a carrier. The first accused is allegedly a cousin of the first petitioner. The first accused is stated to be involved in several smuggling activities. More information is yet to be obtained regarding the antecedents of the first accused. Non-cooperation of the first petitioner is prejudicing the investigation". 

The first petitioner was thus denied bail by the Court. The bail plea by the second petitioner was accepted subject to the condition of her executing a bond for Rs.1,00,000/- with two solvent sureties. The Court further clarified that in case of violation of any of the conditions, the jurisdictional Court shall be empowered to consider the application for cancellation, and pass appropriate Orders.

The plea was thus allowed in part. 

Senior Advocate S. Sreekumar and Advocates P. Martin Jose, P. Prijith, Thomas P. Kuruvilla, R. Githesh, M.A. Mohammed Siraj, Ajay Ben Jose, Manjunath Menon, Sachin Jacob Ambat, Anna Linda Eden, and Harikrishnan S. appeared on behalf of the petitioners. 

Case Title: Pulikkippoyil Sharafudheen & Anr. v. Superintendent of Customs 

Citation: 2023 LiveLaw (Ker) 300 

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