INDIA & ANR. (Writ Petition (Crl.) No. 66 of 2011) SEPTEMBER 30 & Ors. v. UNION OF INDIA & ANR. 241 the First Schedule to the Code & Ors.

ALTAMAS KABIR, J. 1. Two sets of matters have been c heard together, one relating to the provisions of the Customs Act, 1962, and the other involving the provisions of the Central Excise Act, 1944, since the issue in both sets of matters is the same. The common question in these two sets of matters is that since all offences under the Central Excise Act, 1944 and the Customs Act, 1962, are non-cognizable, are such offences bailable? Although, the provisions of both the two Acts in this regard are pari materia to each other, we shall first take up the matters relating to the Central Excise Act, 1944, hereinafter referred to as "the 1944 Act", namely, (1) Writ Petition (Crl) E No.66 of 2011, Om Prakash & Anr. Vs. Union of India & Anr., which has been heard as the lead case, (2) Writ Petition No.85 of 2010 and (3) Writ Petition (Crl.) Nos.74, 87, 101 and 102 of 2011.

2. Section 9A of the 1944 Act, which was introduced in the Act with effect from 1st September, 1972, provides that certain offences are to be non-cognizable. Since we shall be dealing with this provision in some detail, the same is extracted hereinbelow :- "9A. Certain offences to be non-cognizable. - (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1898 (5 of 1898), offences under section 9 shall be deemed to be non-cognizable within the meaning of that Code. (2) Any offence under this Chapter may, either before F G H OM PRAKASH & ANR. v. UNION OF INDIA & ANR. 247 [ALTAMAS KABIR, J.] or after the institution of prosecution, be compounded by A the Chief Commissioner o(Central Excise on payment, by the person accused of the offence to the Central Government, of such compounding amount and in such manner of compounding, as may be prescribed. Provided that nothing contained in this sub-section B shall apply to - (a) (b) (c) (d) a person who has been allowed to compound once in respect of any of the offences under the provisions of clause (a), (b), (bb), (bbb), (bbbb) or C (c) of sub-section (1) of Section 9; a person who has been accused of committing an offence under this Act which is also an offence under the Narcotic Drugs and Psychotropic D Substances Act, 1985 (61 of 1985); a person who has been allowed to compound once in respect of any offence under this Chapter for goods of value exceeding rupees one crore; a person who has been convicted by the court under this Act on or after the 30th day of December, 2005." E

3. What is important is the non-obstante clause with which the Section begins and in very categorical terms makes it'clear that notwithstanding anything contained in the Code of Criminal Procedure, offences under Section 9 of the 1944 Act would be deemed to be non-cognizable within the meaning of the Code. In fact, Sub-section (2) of Section 9A also provides for G compounding of offences upon payment of the compounding amount with the exceptions as mentioned in the proviso thereto. F

4. Mr. Mukul Rohatgi, learned senior counsel appearing for the Petitioners in both sets of matters, submitted that since the expressions "cognizable" or "non-cognizable" or even "bailable H 248 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R. A offences" had not been defined in either the 1944 Act or the Customs Act, 1962, one would have to refer to the provisions of the Code of Criminal Procedure, 1973 (Cr.P.C.) to understand the meaning of the said expressions in relation to criminal offences. Section 2(a) Cr.P.C. defines "bailable B offence" as follows :- "2(a). "bailable offence" means an offence which is shown as bailable in the First Schedule, or which is made bailable by any other law for the time being in force; and "non- bailable offence" means any other offence;" Section 2(c) defines "cognizable offence" as follows : "2(c). "cognizable offence" means an offence for which, and. "cognizable case" means a case in which, a police officer may, in accordance with the First Schedule or under any other law for the time being in force, arrest without warrant;" Section 2(1) defines "non-cognizable offence" as follows : "2(1). "non-cognizable offence" means an offence for which, and "non-cognizable case" means a case in which, a police officer has no authority to arrest without warrant;" c D E

5. Mr. Rohatgi then submitted that offences which are punishable under the 1944 Act have been indicated in Section F 9 of the said Act and these sets of cases relate to the offences indicated in Section 9(1)(d) of the said Act. Section 9(1)(d) is again divided into two sub-clauses and reads as follows:- "9. Offences and penalties. (1) Whoever commits any of the following offences, namely:- (a) (c) (d) attempts to commit, or abets the commission of, any of the offences mentioned in clauses (a) and G H OM PRAKASH & ANR. v. UNION OF INDIA & ANR. 249 [ALTAMAS KABIR, J.] (b) of this section; A shall be punishable,- (i) in the case of an offence relating to any excisable goods, the duty leviable thereon under this Act exceeds one lakh of rupees, with imprisonment for 8 a term which may extend to seven years and with fine: Provided that in the absence of special and adequate reasons to the contrary to be recorded in the judgment of C the Court such imprisonment shall not be for a term of less than six months; (ii) in any other case, with imprisonment for a term which may extend to three years or with fine or with both." · 0

6. What is of significance is that offences covered by clauses (a) and (b) and the subsequent amendments thereto relating to any excisable goods, where the duty leviable thereon under the Act exceeds one lakh of rupees, would be punishable E with imprisonment for a term which may extend to seven years and with fine, whereas under Section 9(1)(d)(ii), in any other case, the offence would be punishable with imprisonment for a term which may extend to three years or with fine or with both.

7. Since the question of arrest is in issue in these sets of cases, Mr. Rohatgi then referred to the provisions of Section 13 of the 1944 Act, which deals with the power to arrest in the following terms:- F . "13. Power to arrest: - Any Central Excise Officer not G below the rank of Inspector of Central Excise may, with the prior approval of the Commissioner of Central Excise, arrest any person whom he has reason to believe to· be liable to punishment under this Act or the rules made ·thereunder." H 250 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R. A B c

8. Mr. Rohatgi submitted that the said power would have to be read along with Sections 18, 19, 20 and 21 of the 1944 Act along with Section 155 Cr.P.C. Section 18 of the 1944 Act provides for searches and how arrests are to be made under the Act and rules framed thereunder and reads as follows :- " 18. Searches and arrests how to be made. All searches made under this Act or any rules made thereunder and all arrests made under this Act shall be carried out in accordance with the provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating respectively to searches and arrests made under that Code."

9. Sections 19, 20 and 21 deal with how a person arrested is to be dealt with after his arrest and the procedure to be D followed by the Officer in-Charge of the police station concerned to· whom any person is forwarded under Section 19. For the sake of understanding the Scheme, the provisions of Sections 19, 20 and 21 of the 1944 Act are extracted hereinbelow ad seriatim :- E F G H "19. Disposal of persons arrested.· Every person arrested under this Act shall be forwarded without delay to the nearest Central Excise Officer empowered to send persons so arrested to a Magistrate, or, if there is no such Central Excise Officer within a reasonable distance, to the officer-in-charge of the nearest police station.

20. Procedure to be followed by officer-in-charge of police station.- The officer-in-charge of a police station to whom any person is forwarded under section 19 shall either admit him to bail to appear before the Magistrate having jurisdiction, or in default of bail forward him in custody to such Magistrate.

21. Inquiry how to be made by Central E;xcise Officers against arrested persons forwardecfto them under OM PRAKASH & ANR. v. UNION OF INDIA & ANR. 251 [ALTAMAS KABIR, J.] Section 19.-(1) When any person is forwarded under A section 19 to a Central Excise Officer empowered to send persons so arrested to a Magistrate, the Central Excise Officer shall proceed to enquire into the charge against him. (2} For this purpose, the Central Excise Officer may exercise the same powers and shall be subject to the same provisions as the officer-in-charge of a police station may exercise, and is subject to under the Code of Criminal Procedure, 1898 (5 of 1898), when investigating a C cognizable case: ·B Provided that - (a) if the Central Excise Officer is of opinion that there is sufficient evidence or reasonable ground of suspicion o against the accused person, he shall either admit him to bail to appear before a Magistrate having jurisdiction in the case, or forward him in custody to such Magistrate; (b) if it appears to the Central Excise Officer that there is E not sufficient evidence or reasonable ground of suspicion 'against the accused person, he shall release the accused person on his executing a bond, with or without sureties as the Central Excise Officer may direct, to appear, if and when so required,. before the Magistrate having jurisdiction, and shall make a full report of all the particulars F of the case to his official superior.•

10. As indicated in Section 18, all steps taken under Sections 19, 20 and 21 would have to be taken in accordance with the provisions of the Code of Criminal Procedure and the G relevant provision thereof is Section 155 which deals with information as to non-cognizable cases and investigation of such cases, since under Section 9A of the 1944 Act all offences under the Act are non-cognizable. For the sake of reference Section 155 Cr.P.C. is extracted hereinbelow :- H 252 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R. A B c D E "155. Information as to non-cognizable cases and investigation of such cases.- (1) When information is given to an officer in charge of a police station of the commission within the limits of such station of a non cognizable offence, he shall enter or cause to be entered the substance of the information in a book to be kept by such officer in such form as the State Government may prescribe in this behalf, and refer, the informant to the Magistrate. (2) No police officer shall investigate a non-cognizable case without the order of a Magistrate having power to try such case or commit the case for trial. (3) Any police officer receiving such order may exercise the same powers in respect of the investigation (except the power to arrest without warrant) as an officer in charge of a police station may exercise in a cognizable case. (4) Where a case relates to two or more offences of which at least one is cognizable, the case shall be deemed to be a cognizable case, notwithstanding that the other offences are non-cognizable." F

11. As will be evident from the aforesaid provisions of Section 155 Cr.P.C., no police officer in charge of a police station is entitled to investigate a non-cognizable case without the order of a Magistrate having the power to try such case or to commit the case for trial. Furthermore, no such police officer is entitled to effect arrest in a non-cognizable case without a warrant to effect such arrest. According to Mr. Rohatgi, since all offences under the 1944 Act, irrespective of the length of G punishment are deemed to be non-cognizable, the aforesaid provisions would fully apply to all such cases. This now brings us to the question as to whether all offences under the 1944 Act are bailable or not. As has been indicated hereinbefore in this judgment, Section 2(a) of the Code defines "bailable H offence" to be an offence shown as bailable in the First OM PRAKASH & ANR. v. UNION OF INDIA & ANR. 253 [ALTAMAS KABIR, J.] Schedule to the Code or which is made bailable by any other A law for the time being in force. The First Schedule to the Code which deals with classification of offences is in two parts. The first part deals with offences under the Indian Penal Code, while the second part deals with classification of offences in respect of other laws. Inasmuch as, the offences relate to the offences B under the 1944 Act,. it is the second part of the First Schedule which will have application to the cases in hand. The last item in the list of offences provides that if the offence is punishable with imprisonmentfor less than three years or with fine only, the offence will be non-cognizable and bailable. Accordingly, if the c · offences come under the said category, they would be both non cognizable as well as bailable offences. However, in the case of the 1944 Act, in view of Section 9A, all offences under the Act have been made non-cognizable and having regard to the provisions of Section 155, neither could any investigation be 0 commenced in such cases, nor could a person be arrested in respect of such offence, without a warrant for such arrest.

12. Mr. Rohatgi submitted that Section 20 of the 1944 Act would also make it clear that the Officer in-Charge of a police station to whom any person arrested is forwarded under · E Section 19, shall either admit him to bail to appear before the Magistrate having jurisdJction, or' in default of bail forward him in custody to such Magistrate. In other words, unless the offence was bailable, the Officer in-Charge of the police station would not have been vested with the power to admit him to bail and F tc:i direct him to appear before the Magistrate having jurisdiction. Mr. Rohatgi pointed out that Section 21 which deals with the manner in which the enquiry is to be made by the Central Excise Officer against the arrested person forwarded to him under Section 19, is similar to the procedure prescribed under G Section 20.

13._The submissions made by Mr. Rohatgi will have to be considered in the context of the provisions of Sections 9A, 13 and 18 to 21 of ttie 1944 Act and Section 155 Cr.P.C. H 254 SUPREME COURT REPORTS [2011) 14 (ADDL.) S.C.R.

14. Section 41 of the Code provides the circumstances in which a police officer may, without an order from a Magistrate and without a warrant, arrest any person. What is relevant for our purpose are Sub-section (1)(a) and Sub-section (2) of Section 41 which are extracted hereinbelow:- "41. When police may arrest without warrant- (1) Any police officer may without an order from a Magistrate and without a warrant, arrest any person- (a) Who has been concerned in any cognizable offence, or against whom a reasQnable complaint has been made, or credible information has been received, or a reasonable suspicion exists, of his having been so concerned; or (b) to (h) ............................................................. .. (2) Any officer in c~arge of a police station may, in like manner, arrest or cause to be arrested any, person, belonging to one or more of the categories of persons specified in section 109 or section 1-10." A B c D E

15. An exception to the provisions of Section 41 has been made in Section 42 of the Code which enables a police officer to arrest a person who has committed in the presence of such officer or has been accused of committing a non-cognizable F offence refuses, on demand of such officer, to give his name and residence or gives a name or residence which such officer has reason to believe to be false.

16. One other provision of the Code referred to is Section 46 which deals with how arrests are to be made. The same G merely provides the procedure for effecting the arrest for which purpose the officer or other person making the same shall actually touch or confine the body of the person to be arrested. The said provision is not really material for a determination of . the issues in this case and need not detain us. H OM PRAKASH & ANR. v. UNION OF INDIA & ANR. 255 [ALTAMAS KABIR, J.]

17. In this connection, Section 436 Cr.P.C. which provides A in what cases bail could be taken, may be taken note of. The said Section provides as under:- "436. In what cases bail to be taken.-(1) When any person other than a person accused of a non-bailable offence is arrested or detained without warrant by an officer in charge of a police station, or appears or is brought before a court, and is prepared at any time while in the custody of such officer or at any stage of the proceeding before such court to give bail, such person C shall be released on bail: 8 Provided that such officer or court, if he or it thinks fit, may, instead of taking bail from such person, discharge him on his executing a bond without sureties for his appearance as hereinafter provided: D Provided further that nothing in this section shall be deemed to affect the provisions of sub-section (3) of section 116 [or section 446A]. (2) Notwithstanding anything contained in sub-section (1), E where a person has failed to comply with the conditions of the bair-bond as regards the time and place of attendance, the court may refuse to release him on bail, when on a subsequent occasion in the same case he appears before the court or is brought in custody and any F such refusa,I shall be without prejudice to the powers of the court to call upon any person bound by such bond to pay the penalty thereof under section 446." As will be evident from the above, when any person, other G than a person accused of a non-bailable offence, is arrested or detained without warrant by an Officer in-Charge of a polioo . station, or is brought before a Court, and is prepared at any time while in the custody of such officer or at any stage of the proceeding before a Court to give bail, he shall be released H 256 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R. A on bail. In other words, in respect of a non-cognizable case, a person who is arrested without warrant shall be released on bail if he is prepared to give bail. The scheme of the Section is that without a warrant, if a person is arrested by the Officer in Charge of a police station or if such person is brought before s the Court, he is entitled to be released on bail, either by the police officer, or the Court concerned.

18. The legal contentions indicated hereinabove were opposed on behalf of the Union of India and the stand taken by Mr. Mohan Parasaran, learned Additional Solicitor General, C was that what was required to be considered in the Writ Petitions was whether there is a power to arrest vested in the officers exercising powers under Section 13 of the 1944 Act without issuance of a warrant and whether such power could_ be exercised only after an FIR/complaint had been lodged D under Section 13 of the aforesaid Act. It was also contended that it was necessary to consider further whether criminal prosecution or investigation could be initiated, which could lead to arrest, without final adjudication of a dual liability. The last contention raised was whether offences referred to in Section E 9(1Hd)(i) of the 1944 Act were bailable or not on account of the fact that in the said Act by a deeming fiction all offences under the respective Sections are deemed to be non cognizable. Mr. Parasaran pointed out that the Preamble to the 1944 Act states that it is expedient to consolidate and ~mend the law relating to central excise duty on goods manufactured or produced in certain parts of India. Under the Act it is the duty of the officers to ensure that duty is not evaded and persons who attempt to evade duty are proceeded against. The learned Additional Solicitor General submitted that wide powers have G been conferred on the Officers under the Act to enable them to discharge their duties in an effective manner, though not for the purpose of prevention and detection of crime, but to prevent smuggling of goods or cl_andestine removal thereof and for due realization of excise duties. It was also urged that the Officers H under the said Act are not police officers and that the said F OM PRAKASH & ANR. v. UNION OF INDIA & ANR. 257 [ALTAMAS KABIR, J.] question is no longer res integra. Consequently, in Ramesh A Chandra Mehta Vs. State of West Bengal [AIR 1970 SC 940], a Constitution Bench of this Court held that since a customs officer is not a police officer, as would also be the case in respect of an officer under the Excise Act, submissions made before him would not be covered under Section 25 of the B Evidence Act.

19. Mr. Prasaran submitted that the High Court had also made a distinction on the basis that while Section 13 of the 1944 Act refers to a "person" and not to an "accused" or "accused person", the power under the Central Excise Act is C for arrest of any person who is suspected of having committed an offence and is not an accused, but is a person who would become an accused after the filing of a complaint or lodging of an FIR, as was held by this Court in the case of Directorate of Enforcement Vs. Deepak Mahajan [(1994) 3 SCC 440]. The D learned ASG submitted that although under the powers reserved under the Customs Act and the Excise Act to a Customs Officer or a Central Excise Officer, as the case may be, the said Officer would be entitled to exercise powers akin to that of a police officer, but that did not mean that such · E officers are police officers in the eyes of law. The said officers had no authority or power to file an investigation report under Section 173 Cr.P.C. and in all cases the officer concerned has to produce the suspect before the Magistrate after investigation for the purpose of remand. The learned ASG submitted that F only on the filing of a complaint, can the criminal law be set in motion.

20. Mr. Prasaran also urged that the power to arrest must necessarily be vested in the Officer concerned under the 1944 G Act for the efficient discharge of his functions and duties, inter alia, in order to prevent and tackle the menace of black money .and money laundering. Mr. Prasaran submitted that in Union of India Vs. Pa dam Narian Aggarwal [2008 (231) EL T 397(SC)], this Court had held that even though personal liberty H 258 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R. A is taken away, there are norms and guidelines providing safeguards so that such a power is not abused, but is exercised on objective facts with regard to commission of any offence. Reference was also made to the decision of the Punjab & Haryana High Court in Sunil Gupta Vs. Union of India [2000 B (118) ELT 8 P&H] and Bhavin lmpex Pvt. Ltd. Vs. State of Gujarat[2.010 (260) ELT 526 (Guj)), in which the issue, which is exactly in issue in the present case, was considered and, as submitted by the learned ASG, it has been held that the FIR or complaint or warrant is not a necessary pre-condition for an c Officer under the Act to exercise powers of arrest. It was also submitted that the Petitioners had nowhere questioned the vires of the Section granting power to investigate tc: the Officer under the Act as being unconstitutional and ultra vires and as such in case of any mistake or illegality in the exercise of such statutory powers, the affected persons would always have recourse to the Courts. 0

21. Coming to the question of the provisions of Section 9A of the 1944 Act wherein in Sub-section (1) it has been clearly mentioned that notwithstanding anything contained in the E Code of Criminal Procedure, offences under Section 9 shall be deemed to be non-cognizable within the meaning of the Code, the learned ASG submitted that the aforesaid Section does not state anything as to whether such offences are also bailable or not. It was contended that if the submissions made by Mr. F Rohatgi on this point were to be accepted, it would mean that all offences under Section 9, including offences punish11ble with imprisonment upto seven years, would also be bailable, which could not have been the intention of the legislators enacting the 1944 Act. Mr. Prasaran submitted that the provisions of G Section 9A of the 1944 Act merely import the provisions of Section 2(i) Cr.P.C., thereby debarring a "police officer" from arresting a person without warrant for an offence under the Act. It was submitted that Section 9A does not refer to a Central Excise Officer and as such there is no embargo on an Officer H under the 1944 Act from arresting a person. OM PRAKASH & ANR. v. UNION OF INDIA & ANR. 259 [ALTAMAS KABIR, J.] •

22. Mr. Prasaran's next submission was with regard to the A provisions of part 2 of the First Schedule to the Code of Criminal Procedure and it was submitted that the same has to be given a meaningful interpretation. It was urged that merely because a discretion had been given to the Magistrate to award punishment of less than three years, it must fall under B the third head of the said Schedule and, therefore, be non cognizable and bailable. On the other hand, as long as the Magistrate had the power to sentence a person for imprisonment of three years or more, notwithstanding the fact that he has discretion to provide a sentence of less than three c year, the same will make the offence fall under the second head thereby making such offence non-bailable. It was submitted that in essence it is the maximum punishment which has to determine the head under which the offence falls in Part 2 of the First Schedule to the Code and not the use of discretion by the Magistrate to award a lesser sentence. 0