Gold Smuggling With A Mere Illegal Profit Motive Not A 'Terrorist Act' Under UAPA : Kerala High Court

The Kerala High Court has held that mere act of gold smuggling, which is covered under the Customs Act, will not amount to a "terrorist act" under the Unlawful Activities Prevention Act unless the same is done with the intention to threaten the economic security of the nation.

Gold smuggling with a mere illegal profit motive will fall within the aforementioned definition of terrorist act, the Court said.

A division bench comprising Justices A Hariprasad and MR Anitha held so while dismissing the appeals filed by the National Investigation Agency(NIA) against an order of the Special NIA Court at Kochi granting bail to ten persons who were accused in the diplomatic channel gold smuggling case.

"...we are unable to hold that smuggling of gold simplicitor will fall within Section 15(1)(a) (iiia) of UA(P) Act. In other words, gold smuggling clearly covered by the provisions of the Customs Act will not fall within the definition of terrorist act in Section 15 of UA(P) Act unless evidence is brought out to show that it is done with the intent to threaten or it is likely to threaten the economic security or monetary stability of India", the High Court observed

Section 15(I)(iiia) of UAPA mentions activities with intent to threaten or likely to threaten the economic security of the country causing "damage to, the monetary stability of India by way of production or smuggling or circulation of high quality counterfeit Indian paper currency, coin or of any other material".

Interpreting this provision, the High Court observed :

"In our view, what is made an offence under Section 15(1)(a)(iiia) of UA(P) Act is causing damage to the monetary stability of India by way of production or smuggling or circulation of high quality counterfeit Indian paper currency, coin or any other material relatable to currency or coin. "Other material" can be any material connected to counterfeit Indian paper currency or counterfeit Indian coin, like machinery or implements or high quality paper or any other material which could be used for producing or circulating fake currency or coin. Illegal acts referred to in the above provision certainly will have a direct impact on the economic security of India".

"In our opinion, it does not include gold as the words employed in the Sub-clause specifically mention about production or smuggling or circulation of high quality counterfeit Indian paper currency or coin and therefore gold cannot be grouped along with paper currency or coin even though gold is a valuable substance and has a great potential to get converted into cash. Arrangement of words indicating the things mentioned in the provision does not prompt us to think that gold smuggling with a mere illegal profit motive will fall within the aforementioned definition of terrorist act. Besides, we take cognizance of the fact that there can be many other things of enormous value like precious metals and stones that could be smuggled for making an unlawful gain. We do not find any logic to include gold alone along with counterfeit Indian paper currency or coin".

In the Court's opinion, if the legislature had an intention to include gold smuggling also as terrorist act, there was no difficulty in expressly providing a limb to Section 15 of UA(P) Act.  The Court regarded this as a case of casus omissus. The legislature must have been aware of the existence of the Customs Act when it amended Section 15. Non-inclusion of the Customs Act in the Schedule to NIA Act also must be regarded as a conscious act by the legislature.

Rajasthan High Court judgment distinguished

The NIA placed reliance on a recent judgment of the Rajasthan High Court which held that the offence of gold smuggling with the intent to threaten or likely to threaten the economic security of the country covered under the definition of 'terrorist act' under Section 15 of the Unlawful Activities Prevention Act, 1967(UAPA). In that case, the High Court had rejected the contention that gold is not covered under "other material".

However, the High Court Division Bench noted that it was an observation made by the Rajasthan High Court while refusing to quash an FIR under Section 482 of the Code of Criminal Procedure.

"It is clear from the decision that no analysis of the provision was made by the learned single Judge. Moreover, no specific reason has been stated for making the aforementioned observations. It is to be remembered that the learned single Judge was examining whether there was any sufficient reason to quash an FIR at the initial stage of the investigation. We do not find any law laid down in the above decision. We are, therefore, not persuaded by the single line observation made by the learned single Judge that "any other material" occurring in Section 15(1)(a)(iiia) of UA(P) Act is intended to cover gold smuggling also", the Kerala High Court observed, distinguishing the Rajasthan decision.

The division bench also referred to a 2018 decision of the High Court in Abdul Salam v NIA which held by 2:1 majority that the offence of fake currency circulation was not a 'terrorist activity' under UAPA before the 2013 amendment.

The Special Court had observed that the 10 accused accused were persons who had allegedly smuggled gold for their personal benefit, and the NIA has not established any larger conspiracy to threaten the economic security of the nation.

The case relates to the seizure of 30 kg of 24 carat gold worth ₹14.82 crore at Thiruvananthapuram airport on July 5 by the Customs (Preventive) Commissionerate, Kochi, which was sought to be brought through the diplomatic consignment sent to UAE consulate at the State capital.

The prime accused in the case, Swapna Suresh and PR Sarith, who are accused to misusing diplomatic cargo channel to smuggle gold, are still facing NIA charges.

The accused before the High Court were persons who had allegedly distributed gold from the prime accused within the state.

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