Sri Purusottam Das Sharma vs Unknown on 9 April, 2010

THE HIGH COURT OF ORISSA : CUTTACK
CRLMC NO.937 Of 2010

In the matter of an application under Section 482 of the Code of
Criminal Procedure, 1973.

Sri Purusottam Das Sharma .......... .. Petitioner

--VersuS-

Sri Manoj Kumar Pattnaik, Inspector,'
Central Excise, Customs

and Service Tax and another. ' .......... .. Opp. Parties
For Petitioner : M / s. Laxmidhar Pangari, S.R.Pani
85 A.K.Das

For Opp. Party : Mr. Prasant Kishore Ray,
. (Central Excise Department)

PRESENT:

THE HON'BLE MR. JUSTICE INDRAJIT MAHANTY.

Date of Hearing: 08.04.2010 Date of Judgment: 09.04.2010

I.Mahanty, J. In the present application under Section 482 of the Code of
Criminal Procedure, 1973, prayer has been made by the petitioner to set
aside certain conditions fixed by the Inspector (Preventive) Central
Excise, Customs & Service Tax, Bhubanesv/ar--Il (Opposite Party vNo.1)

while granting bail to the petitioner pursuant to an order dated



.1.
J 2

11.3.2010 passed by this Court in BLAPL No.2887 of 2010, granting
anticipatory bail to the petitioner.

2. Shorn of unnecessary details, it appears that the Central
Excise authorities conducted search and seizure on the ipreinises of M / s.
Seeta Integrated Steel & Energy Ltd. on,4th November, 2009 and on the
basis of such search and seizure, a proceeding for enquiry for violation of
the provisions of Central Excise Act, 1944 has been initiated thereunder.
From the pleadings in the present application, it appears that the
petitioner pursuant -to summons 'issued to him appeared before the
Superintendent (Prev.), Commissionerate of Central Excise, Customs and
Service Tax, Bhubaneswar (Opposite Party No.2) on 5.1 1.2009,
15.1.2010 and 28.1.2010 and also produced" certain documents and also
had his statements recorded.

3. It is stated that the petitioner had been issued with a further
summon dated 19.2.2010 by which order, he Was directed to produce
some more documents mentioned in the schedule to such summons
under Annexure-1. Apprehending arrest by the Central Excise Officers as
well as apprehending that he may not be admitted on bail, an application
under Section 438 Cr.P.C. for anticipatory bail was filed by-the petitioner
in BLAPL No.2887 of 2010, before this Court and the same came to be
disposed of on 1 1.3.2010 with the following directions:

"Considering the submission of learned
"counsel for the parties and keeping in View the nature
and gravity of the offence alleged against the
petitioner, it is directed that in the event of arrest of
the Petitioner in Central Excise Proceeding
No.C.No.IV(6) 15/CE/CPU/BBSR--II/2009, they shall
be released on bail by theiarresting officer on such
terms an conditions as the arresting officer may deem
just and proper. It is needless to say that in case of
violation of any such terms and conditions, it is open
or the authorities to proceed against the petitioner, in
accordance with law. ' i



,1» "" 0 concerned.

The petitioner 'shall appear before the
Superintendent (Prev.)-- Opposite Party, on 25.3.2010
at 10.30 A.M. --

The BLAPL is disposed of.

Issue urgent certified copy as per rules."

4. It is further stated that the petitioner appeared before
Opposite Party No.2 on 25.3.2010 and at about 2.00 P.M. of the said
date, Opposite Party No.1 arrested the petitioner and passed orders
directing the petitioner to comply with the following conditions for being
released on bail:

"(i) Sri Purusotam Das Sharma shall immediately furnish a
Bail bond for Rs.50,000/-- (Rupees Fifty Thousand)
only, along with surety of equivalent amount, before
the proper officer.

(ii) Sri Purusotam Das Sharma shall appear before the
Superintendent (Prev.), Central Excise, Customes -&
Service Tax, Bhubaneswar-II Cornmissionerate,
Central Revenue Building, Rajaswa Vihar,
BhubanesWar--O7, on all Working days, for 3 Weeks,
starting from 26.3.2010 to give evidence and to
submit records/ documents called for, as being
relevant to the enquiry.

(iii) Sri Purosottam Das Sharma shall no_t_leave the office
of the Commissioner, Central Excise, Customs 85
Service Tax, Bhubaneswar-II Commissionerate,
Central Revenue Building, Rajaswa Vihar,
Bhubaneswar-07 on the aforesaid days, between
10.30 A.M. and 06.00 P.M. without the prior
permission of. the Superintendent/ Inspector

(iv) Sri Surosottam Das Sharma shall not leave the
country Without the prior permission of the
investigating officer.

'' (v) Sri Purosottarn Das Sharma shall cooperate with the
' investigation in every possible manner.

Sd/--, _



(Manoj Kumar Pattanayak),
Inspector (Prev.),
Central Excise, Customs 85
Service Tax, Bhubaneswar--Il."

5. Nlr.L.Pangari, learned counsel for the petitioner, at the out
set, submitted that the challenge has been made by the petitioner to
Condition Nos.(i), (ii) 85 (iii), contained' in the order dated 25.3.2010
passed by the Arresting Officer (O.P. No.1) inter alia, on the ground that,
the Opposite Party has imposed such Conditions which are absolutely
perverse, inhuman, capricious, unreasonable and devoid of justice. He
further states that imposing the aforesaid conditions were actuated by
malafides and vindictive design of the Opposite Parties and was intended

to completely nullify and frustrate the direction of this Hon'ble Court, by

'Which order, the petitioner had been directed to be released on bail.

He also submitted that the directions to the petitioner to
immediate furnish bail bond of Rs.50,000/-- aiéfig' with Esurety of
Rs.50,000/- was imposed with the View that the petitioner would not be
in a position to arrange the said amount and, therefore, would not avail
the benefit of bail. It is stated that the petitioner was imposed with such
conditions since the Central Excise Authorities considered the
application under Section 438 Cr.P.C. for anticipatory bail as an
audacious act on the part of the petitioner. It is stated that, it was with a
great amount of difficulty, that the petitioner could arrange the necessary
funds 'for the purpose of meeting such requirement as imposed in
Condition No.(i). 7
6. In so far as challenge to Condition" 'Nos.(ii) 85 (iii) are
concerned, learned counsel for 'the petitioner submitted that the Whole

object of the directions requiring the petitioner to be present, on all

3 working days for three weeks starting from 26.3.2010 and a further

1 direction to the petitioner, not to leave the office of the Commissioner



between 10.30 A.M. and 06.00 P.M.. would itself clearly indicate that they
are intended to frustrate the order of bail granted by the High Court and
have been imposed to cause harassment and physical strain to the
petitioner, who is the permanent resident of Rajgangpur in the district of
Sundargarh and had to reside at Bhubaneswar, only to comply with the
conditions under which he wasireleased on bail by the Arresting Officer.
Learned counsel for the petitioner, therefore, submitted that Condition
Nos.(i), (ii) 85 (iii) may be quashed and such terms may be fixed in the
interest of 0 law and justice.
7. In this respect, learned counsel for the petitioner has placed
reliance to the following judgments:  v t I .

1.

AIR 1985 SC 1666 (Keshab Narayan Banerjee and

another v. The State of Bihar)

2. 1995 CRI.L.J. 863 (Anwar Hussain v. State of Orissa)

3. 86 (1998) C.L.T. 53 (A Kokan Rao V. State of Orissa) =

The aforesaid judgments cited by the learned counsel for the
petitioner was to substantiate the plea that a heavy amount should not
be demanded as surety amount and the guiding principles on which an
accused can be released on personal bond Without sureties. The Hon’ble
Supreme Court in the case of Hussainara Khateon V. Home
Secretaqry, State of Bihar, AIR 1979 SC 1360 held that, the decisions
regarding the amount of the bond should be an individualized decision,
depending on the individual finahcial circumstances of the accused and

the probability of his absconding and fixing the surety amount, condition

. should be taken of family ties and relationship, roots in the community,

employment, status etc. and in appropriate cases, the Court ought to be

f- released the accused on his personal bond. While the accused may be

iirequired to furnish cash security but such conditions of bail should not

be harsh, oppressive and should not virtually result in denial of bail to
an accused.

8. . Mr. Ray, learned counsel for the Central Excise Department,
on theother hand, opposed the prayer for modification of the conditions
of bail granted to the petitioner and relied extensively on the averments
made in the counter affidavit filed on behalf of Opposite Parties 1 and 2.
He essentially contended that the Company, i.e. M / s. Seeta Integrated
Steel 81; Energy Ltd. has clandestinely removed a huge amount of sponge
iron produced at their plant, resulting in loss of more than Rs.94 lakhs of
Central Excise duty. He contended that none of the condition imposed by
the Arresting Officer–Opposite Party No.1 could be considered to amount
to denying the petitioner the benefit granted to him by the order of this
Court in BLAPL No.2887i of 2010. He further contended that White coller
crime _requires in depth investigation and putting a Witness to
continuous interrogation is very much required, in order to elicit the true
facts in course of such enquiry. .

9. In this respect, the learned counsel for the Central Excise
Department placed reliance on a judgment of the Hon’ble Supreme Court
in the case of Dukhishyam Benupani V. Arun Kumar Bajoria, AIR 1998
A SC 696. Sri P.K.Ray submitted that an Investigating Agency should be
free to fix the venue, time and the manner of question to an accused
persons involved in such crimes. Learned counsel also placed reliance on
various documents appended to_ the counter affidavit and in particular,
Annexure–D to the counter affidavit. This “statement itself contains the
details’ of the time at which the petitioner appeared before the
Superintendent (Preventive), Commissionerate of ‘Central Excise,
Customs and Service Tax, Bhubaneswar-II (Opposite Party No.2). It is
stated on ‘behalf of the Opposite Parties that since the date when the

1 order was passed, i.e. 25.3.2010, the petitioner has appeared before the

authority concerned, only on five Working days indicated therein. Apart
from the same, my attention was drawn to the endorsement therein, i.e.
in AnneXure–D, that the Superintendent’ has been pleased to permit the
petitioner to use the “waiting room” and bath room from 10.30 A.M. to
6.00 P.M. till closing of the enquiry and was also “granted lunch–break”
from 1.30 to 2.30 P.M. on the dates he appeared and that the
departmental canteen has also been instructed to provide him lunch, if
so -desired by him, on payment for the same. Learned Counsel for the
Central Excise Department submitted that the authorities have been
thoroughly considerate of all the needs of the petitioner. This, according
to the learned counsel, is indicative of the concern qfithe department for
the well being of the petitioner. I

Apart from the above, he contended that the allegation that
the petitioner had faced untold difficulties in furnishing the bail bond of
Rs.50,000/– and surety amount of Rs.50,000/– was baseless. Since the
company had remitted the requisite amount to the Punjab National
Bank, Bhubaneswar, on the same day on Which, the Arresting Officer
imposed such condition. Therefore, _there existed no basis for the
petitioner to contend that the imposition of the condition for providing
bail bond of Rs.50,000/- and surety amount of Rs.50,000/- could not
have in any’ manner caused any mental or physical strain on the
petitioner. I A

10. In the light of the cpntentions raised by the learned counsel
for both the parties, at the out set, the case of Dukhishyam Benupani
(supra) relied upon by the learned counsel for the Excise Department
requires to be dealt with the accused in the aforesaid case had sought for
anticipatory bail before the Sessions Judge and the same had been

granted by the learned Sessions Judge. The Hon’ble Calcutta High Court

« had modified, certain terms therein, by which order, specific directions

had been issued by the Court fixing the dates on which the accused was
to appear before the Foreign Exchange Regulatory Authorities. The
Department had challenged the said order granting anticipatory bail
before the Hon’ble Supreme Court and the Hon’ble Supreme Court had
allowed thesaid challenge and had set aside both the orders passed by
the learned Sessions Judge as well as the Calcutta High Court.

11. In the present case, while no challenge has been made by p

the Department to the order of anticipatory bail granted in favour of the
petitioner dated 11.3.2010 in BLAPL No.2887 of 2010, even then the
order of anticipatory bail granted by this Court, on the contrary, did not
fix any term or condition and instead left it to the Arresting Officer to fix
such terms and conditions on which the petitioner would be released on
bail. The Arresting Officer upon arresting the petitioner imposed some
conditions in his order dated 25.3.2010 under Annexure–3 to the present
application, which is the subject matter of challenge.

‘ Therefore, I am of the considered View that the judgment in

the case of Dukhishyam Benupani (supra) has n_o_’_a_pplication to the
facts of the case.

12. The next issue relates to Condition No.(i), i.e. requirement of
the petitioner to furnish bail bond of Rs.50,000/ — and surety amount of
Rs.50,000/-. In this respect, I have perused the judgments relied upon
by the learned counsel for the petitioner. No doubt the said judgments
indicate the relevant circumstances which require consideration before
fixing the arnount of surety.

In the case of Keshab Narayan Banerjee (supra), the bail
amount of cash security of Rs.1 lakh with two sureties residing in the
State of Bihar each for the like amount was held to be excessive and the
H0n’ble Supreme Court modified the order directing bail bond of
Rs.25,000/– with two sureties for the like amount.

KO

‘ ‘In the case of Anwar Hussain (siipra), the Orissa High Court

\ placed reliance upon the judgment of the Hon’ble Supreme Court in the
case of Hussainara Khatoon (supra), wherein the I-Ion’ble Supreme
Court has state.d that, the individual’ financial circumstances of an
accused and the probability of his absconding need be taken into
account and condition relates to the sureties should not be excessive as
it would virtually amount to denial of bail. Similar was the view in the
case of Anwar Hussain (supra), in which Orissa High Court fixed the bail
amount of Rs.5000/– in ‘place of Rs.l0,000/– that had been fixed by the
learned S.D.J.M. since the accused-petitioner therein is a an unemployed
youth.”

\ 13. On consideration of the submissions made by the learned
counsel for the petitioner and the Opposite Party, in so’ far as”. Condition
No.(i) is concerned, it is a fact that the said condition was complied with
by the petitioner on the very date in which the order of bail was passed,
by furnishing fixed deposit by Punjab National Bank both towards the
bail bond as well as the surety and as stated by the learned counsel for
the opposite parties, the said money was provided by the Company, i.e.
M / s. Seeta Integrated Steel 85 Energy Ltd. A

i C I am of the considered view that fixation of such a condition
was not excessive keeping in View the amount of revenue sought to have
been evaded by the Company. Therefore, the contention of the learned
counsel for the petitioner for quashin.g Condition N’o.'”(i)’is not’ sustained
and, therefore, fails. . i

14. In so far as challenge to Condition Nos.(ii) and (iii) are
concerned, the same are quoted hereinbelow for convenience:

“(ii) Sri Purusotam Das Sharma shall appear before the
Superintendent (Prev.), Central Excise, Customes .&
Service Tax, Bhubaneswar-II Commissionerate, Central
Revenue Building, Rajaswa Vihar, Bhubaneswar~O7, on all
working days, for 3 weeks, starting from 26.3.2010 to give

10

evidence and to submit records/ documents called for, as
being relevant to the enquiry.

(iii) Sri Purosottam Das Sharma shall not leave the office of
the Commissioner, Central Excise, Customs 85 Service Tax,
Bhubaneswar–II Commissionerate, Central Revenue
Building, Rajaswa Vihar, Bhubaneswar–07 on the
aforesaid days, between 10.30 A.M. and 06.00 P.M.
without the prior permission of the
‘Superintendent/ Inspector concerned.”

Apart from the aforesaid conditions, it appears that
some modification was made thereto by the Superintendent in
Annexure–D to the counter affidavit which is quoted herein below:

“Granted Bail as per the directions of the
Hon’ble High Court of Orissa, vide Order No.3 dated
11.3.2010 against BLAPL No.2’887 of 2010. You are

» requested to be present in the waiting area (room)
from 10.30 A.M. to6.00 P.M. tomorrow and on all
working days for cross examination and production of
records as directed, as the conditions imposed or till
the conclusion of enquiry whichever is earlier. You
will be granted lunch break from 1.30 P.M. to 2.30
~P.M. on the days you appear. The .department canteen
has been requested to provide you lunch, if desired by
you. You have to pay for the same. This is for your

.4. g

information.” ‘

15. V On a conjoint reading of the aforesaid conditions, I am
of the considered view, that since the petitioner has not only been
directed to be present on all working days for three Weeks starting
from 26.3.2010 and has also been debarred from leaving the office pf
the Commissioner during the period from 10.30 A.M. to 6.00 P.M.
on ‘every date and during the said period, he has been directed to §i_t
in the waiting room from 10.30 A.M. to 6.00 P.M. and also has been
movided lunch in the department canteen, this Court is of the

considered View that While the Opposite Party-Central Excise

authorities are statutorily vested with the power 136 carry out an

ll

enquiry for ‘any infraction of the Central Excise Act and no
interference at all by any court is called, yet on a conjoint reading of
Condition Nos.(ii) and (iii) as Well as in Annexure-D, it clearly
indicates that the Arresting Officer has’ confined the movement of
the petitioner for a period of three weeks starting from 26.3.2010 , I
am of the considered View that the same is clearly not only excessive
but also effectively tantamounts to passing an order of detention in
the guise of terms and conditions of bail.

16; At the closure of hearing, the learned counsel for the
Central Excise Department was directed to produce the file
containing the inquiry being conducted and the statements made by
the petitioner. in course of the inquiry. The same wasduly complied
with.

On a perusal of the file produced by the Central Excise
Authority, it appears therefrom that pursuant to the order of
anticipatory bail dated 25.3.2010 passed by this Court in BLAPL No.
2887 of 2010, when the petitioner appeared before the
Superintendent (Opposite Party No.2), on the self–same date, the
petitioner was arrested by the Inspector (Opposite Party No.1) and
the following has been noted in the “Grounds of Arrest” dated
25.3.2010: ‘

“5. In spite of repeated summons by the
investigating officer,__Sri Purusottam Das’ -Slrarma has
failed to produce documents/records necessary for
furtherance of the_ investigation, without sufficient
reason, thus have ‘not cooperated with the
~ investigation.

6. The above offence of clandestine removal of
excisable goods without payment of Central Excise

( duties and non–cooperation with the investigation, is _
punishable under clauses (b), (bb) and (bbb) of Section
9(1) of the Central Excise Act, 1944. It is evident from
the above that this offence has happened with the
knowledge, concern and active involvement of Sri

12

Sharma, the employee in–charge of the Central Excise
matters of SISEL, Such acts and omissions are also
punishable under Section 9AA of the Act ibid. ,

7. Taking into consideration the gravity of the
offence and the fact that Sri Purusottam Das Sharma is
the person in–charge of Central Excise matters of
SISEL, I have reasons to believe that Sri Purusottarn
Das Shanna was actively involved in the offence of
‘clandestine removal as well as undervaluation of
sponge iron, as discussed above, to evade payment of
Central Excise, Customs and Serviace Tax,
Bhubaneswar-II Commissionerate, Bhubaneswar, place
Sri Purusottam Das Sharma, under arrest under
Section–13 of Central Excise Act, 1944 at 14.00 hrs. on
25.3.2010.”

From the aforesaid facts, it would be clear therefrom
that the Excise Authorities after reaching a prima facie conclusion
that the petitioner is responsible for the clandestine removal of
excisable goods and such offence is with the knowledge / connivance
of the petitioner (the ’employee in-charge of the Central Excise
matters of the said Company) and is liable for punishment under
Section 9AA of the Central Excise Act, 1944.

17. In this respect, it becomes extremely impoitant to take
note of Article–20(3) of the Constitution of India:
“Art.20(3) – No person accused of any offence
shall be compelled to be a witness against himself.”

In this regard it has become relevant to note of the
judgment of the Hon’ble Supreme Court in the case of M.F.Sharnia
and others V. Satish Chandra, District Magistrate, Delhi and
others, AIR 1954 SC 300, in which Hon’ble Supreme Court came to

V hold that, if a person has been named by the officers who are

competent to launch a prosecution against him, as having
‘committed an offence, the accused comes Within ‘the’ meaning of

Clause–3 of Article 20 of the Constitution of India.

13

The petitioner has been narned by the Inspector of
Central Excise (in the ground of his arrest), as a person Who is liable
for punishment under Section 9AA of the Central Excise Act and is
therefore, clearly a person who is entitled to the protection
guaranteed by the Constitution of India. ‘

While, it is also a fact that in the judgment of the
Hon’ble Supreme Court. in the case of Poolpandi v.
Superintendent, Central Excise and others, AIR 1992 SC 1795,
the Hon’b1e Supreme Court came to hold that the protection of
Article 20(3) of the Constitution of India is not available to a person
while being 5’interrogated during investigation”, under the provisions

of the Customs Act or the Foreign Exchange Regulation Act (FERA),

\ since such a person is not an “accused of an offence” and is

therefore, not entitled to the protection under Article 20(3), yet, in
thefacts of the present case, since the Arresting Officer (O.P. No.1)
has already stated in the grounds of arrest that the petitioner was
liable for punishment under Section 9AA of the Central Excise Act,
the ‘petitioner is entitled to the benefit of protection guaranteed by
Article–20(3) of the Constitution of India. ‘ I i

It is also Well settled by the Hon’ble Supreme Court that
for the operation of Article–2O (3), no “formal” accusation by the

issue of process of the Court is required and the immunity Article

\ 9 20(3) of the’ Constitution of India would commence, from the

moment the person has been named by the officers who are
competent to launch the prosecution against him as having
committed of an offence and from that moment, such a person
become the “accused of an offence” within the meaning of Article

I 20(3) of the Constitution of India.

14

In the Case of Rarnanilal lihogilal Shah and another v.
D.K.Guha and others, AIR 1973 SC 1196, a Five Judge Bench of the
Hon’ble Supreme Court, has taken into consideration the fact that the
petitioner in the said case had been served with the “grounds of arrest”
under the Foreign Exchange Regulation Act, 1947 and on perusing the
said ground of arrest, While placing reliance on an earlier judgment in
the case of IVI.P.Sharma and others (supra), the I-Ion’ble Supreme Court
came to hold that the petitioner therein was a person “accused of an
offence” within the meaning of Article 20(3) of the Constitution of India
and that the only protection in Article 20(3) gives to him is that he
cannot be compelled to be a witness against himself. But, this does not
mean that he need not given information regarding matters which do not
tend to incriminate him. Having so concluded, the I-Ion’ble Supreme
Court refused to set aside the summons challenged before it and directed
the petitioner to appear before the Deputy Director and answer such
questions, as do not tend to incriminate him as explained by the Hon’b1e
Supreme Court in the case of State of Bombay v. Kathi Kalu Oghad,
AIR, 1é61 so 1808 is as follows: ‘

“In order that a testimony by an accused
person may be said to have been self–ii1criininatory the
compulsion of which comes Within the prohibition of the
constitutional provision, it must be of such a character
that by itself it should have the tendency of incriminating
the accused, if not also of actually doing so. In other
Words, it should be a statement which makes the case
against the accused..person at least probable, considered
by itself.”

18. Therefore, considering the facts of the present case and in
particular, since the petitioner has been “arrested” and the “grounds of
arrest”‘ as has been noted in Paragraph–16 hereinabove, have been

served on him the mandate of law as settled by the Hon’ble Supreme

Court referred to above, Condition Nos.(ii) and (iii) ,imposed by the

15

Arresting Officer (Opposite Party No.’1) under Annexure–3 to the present
application, are set aside and it is directed that the petitioner shall
appear before the authorities concerned as and when summons are
issued to him and answer all questions as. do not tend to incriminate
him, as explained by the Hon’b1e Supreme Court in the case of State of
Bombay v. Kathi Kalu Oghad (supra).

19. With the aforesaid modification to the terms and conditions
of bail granted to the petitioner noted hereinabove, the Criminal
Miscellaneous Case is disposed of.

Nothing stated in this order shall be deemed to be an
expression of any opinion of this Court on the merits of the proceeding
against the petitioner and the authorities are free to proceed against the

petitioner and other accused persons, in accordance with law.

I __ _,,_ ._ ._ .,.r–., ”—‘?”””7”

91 ~,3 . Mc1«kcms’:7,j’.

ORISSA HIGH COURT; CUTTACKK
9th April, 2010/ RKS.