Directorate of Enforcement v. Deepak Mahajan: Case Analysis

By Udisha Ghosh, Symbiosis Law School, Pune

Editor’s Note: The present analysis deals with a case that attempts to resolve issues such as if Section 167 of the Criminal Procedure Code is applicable with regard to the production and detention of a person arrested under the provisions of Section 35 of FERA and Section 104 of Customs Act, and whether the Magistrate has jurisdiction under Section 167 (2) to authorise detention of a person arrested by any Enforcement Officer under FERA.” 

Facts

 Deepak Mahajan, the respondent was arrested by the officers of the Enforcement Directorate for an offence punishable under the provisions of FERA and taken before the Additional Chief Metropolitan Magistrate, New Delhi on the next date as per the mandate of sub-section (2) of Section 35 of the said Act. An application under Section 167(2) of the Code of Criminal Procedure Code[i] was moved by the Enforcement Officer seeking petitioner’s ‘judicial remand’ on the ground that it was necessary to complete the investigation. On the very same day, the respondent unsuccessfully moved the court for bail. The Magistrate remanded the first respondent to judicial custody for fourteen days and subsequently extended the detention period. The first respondent challenged the jurisdiction of the Magistrate in authorising the detention (remand) and the subsequent consecutive extensions. But his plea was rejected on the basis of the decision in Gupta case[ii]. The case ultimately reached the Supreme Court.

Issues

  1. Whether the Special Leave Petition is maintainale.
  2. Whether the Magistrate before whom a person arrested under subsection (1) of Section 35 of the Foreign Exchange Regulation Act of 1973 which is in pari materia with sub-section (1) of Section 104 of the Customs Act of 1962, is produced under sub-section (2) of Section 35 of the Foreign Exchange Regulation Act, has jurisdiction to authorise detention of that person under Section 167(2) of the Code of Criminal Procedure.
  3. Whether Enforcement Directorate under FERA (now FEMA) or Custom’s Act are competent person to take judicial remand of an arrested person.

Rules Applied

Criminal Procedure Code

Section 167(2)[iii] – The Magistrate to whom an accused person is forwarded under this section may, whether he has or has no jurisdiction to try the case, from time to time, authorise the detention of the accused in such custody as such Magistrate thinks fit, for a term not exceeding fifteen days in the whole; and if he has no jurisdiction to try the case or commit it for trial, and considers further detention unnecessary, he may order the accused to be forwarded to a Magistrate having such jurisdiction: Provided that-

(a)  the Magistrate may authorise the detention of the accused person, otherwise than in the custody of the police, beyond the period of fifteen days; if he is satisfied that adequate grounds exist for doing so, but no Magistrate shall authorise the detention of the accused person in custody under this paragraph for a total period exceeding,-

(i) ninety days, where the investigation relates to an offence punishable with death, imprisonment for life or imprisonment for a term of not less than ten years;

(ii) sixty days, where the investigation relates to any other offence, and, on the expiry of the said period of ninety days, or sixty days, as the case may be, the accused person shall be released on bail if he is prepared to and does furnish bail, and every person released on bail under this sub- section shall be deemed to be so released under the provisions of Chapter XXXIII for the purposes of that Chapter

(b) no Magistrate shall authorise detention in any custody under this section unless the accused is produced before him;

(c) no Magistrate of the second class, not specially empowered in this behalf by the High Court, shall authorise detention in the custody of the police. 

Foreign Exchange Regulation Act

Section 35 : Power to arrest[iv]

(1) If any officer of Enforcement authorised in this behalf by the Central Government, by general or special order, has reason to believe that any person in India or within the Indian customs waters has been guilty of an offence punishable under this Act, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest.

(2) Every person arrested under sub-section (1) shall, without unnecessary delay, be taken to a magistrate.

Customs Act

Section 104 Power to arrest[v]

(1) If an officer of customs empowered in this behalf by general or special order of the Commissioner of Customs has reason to believe that any person in India or within the Indian customs waters has committed an offence punishable under section 132 or section 133 or section 135 or section 135A or section 136, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest.

(2) Every person arrested under sub-section (1) shall, without unnecessary delay, be taken to magistrate.

(3)Where an officer of Customs has arrested any person under subsection (1), he shall, for the purpose of releasing such person on bail or otherwise, have the same powers and be subject to the same provisions as the officer- in-charge of a police station has and is subject to under the Code of Criminal Procedure, 1898 (5 of 1898).

(4) Notwithstanding anything contained in the Code of Criminal Procedure, 1898 (5 of 1898), an offence under this Act shall not be cognizable.

Indian Penal Code

Section 35: When such an act is criminal by reason of its being done with a criminal knowledge or intention.—Whenever an act, which is criminal only by reason of its being done with a criminal knowl­edge or intention, is done by several persons, each of such persons who joins in the act with such knowledge or intention is liable for the act in the same manner as if the act were done by him alone with that knowledge or intention.

Constitution

Article 136: Special leave to appeal by the Supreme Court

(1) Notwithstanding anything in this Chapter, the Supreme Court may, in its discretion, grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India

(2) Nothing in clause (1 ) shall apply to any judgment, determination, sentence or order passed or made by any court or tribunal constituted by or under any law relating to the Armed Forces.

Analysis

Issue 1

The petition is maintainable under Article 136 of Constitution. Article 136 provides that the aggrieved party requires a special permission to be heard by the Apex Court in appeal against any judgement or order of any court /tribunal in the territory of India. However the Supreme Court may, in its discretion, grant special leave to appeal from any judgment, decree or order made by any court or tribunal in India. Art. 136 can only be applicable in special cases only and gross violation of principles of natural justice[vi], gross miscarriage of justice, decision shocking the conscience of the court, when concerned point of law cannot be decided by ordinary law and other forums[vii] are the examples of such extraordinary and special circumstances.

Even in the instant case there may be a grave violation of principles of natural justice and gross miscarriage of justice if the Magistrate does not have power to try cases under FERA and Customs Act Further another important question that has been raised under this case is whether the Directorate of Enforcement or Customs Officer fall within the definition of ‘Police Officer’ under Section 167(2) of CrPC. Since such important question of law has to be answered, hence the petition is validly brought under Special Leave Appeal.

Issue 2

Under Section 167(2) of the Code Magistrate before whom an arrestee is taken or sent by an Enforcement Officer or Customs Officer, as the case may be, cannot authorise the detention of the persons so produced or presented, either to judicial custody or to the custody of the arrestor or make subsequent periodical extension of detention or remand in exercise of the powers. In other words, the power to arrest a person coupled with the duty to produce or present him before a Magistrate under Section 35 of FERA or Section 104 of Customs Act ipso facto does not attract the operation of clauses (1) and (2) of Section 167 of the Code.

The question is not what the words in the relevant provision mean but whether there are certain grounds for inferring that the legislature intended to exclude jurisdiction of the courts from authorising the detention of an arrestee whose arrest was effected on the ground that there is reason to believe that the said person has been guilty of an offence punishable under the provisions of FERA or the Customs Act which kind of offences seriously create a dent on the economy of the nation and lead to hazardous consequences. It is permissible for courts to have functional approaches and look into the legislative intention and sometimes it may be even necessary to go behind the words and enactment and take other factors into consideration to give effect to the legislative intention and to the purpose and spirit of the enactment so that no absurdity or practical inconvenience may result and the legislative exercise and its scope and object may not become futile.

Further the Supreme Court stated that to invoke Section 167(1), it is not an indispensable pre- requisite that in all circumstances, the arrest should have been effected only by a police officer and no one else and that there must necessarily be records of entries of a case diary. Hence the Supreme Court stated that the Enforcement Officer or Custom Officer can be termed as ‘police officer’ for the purpose of arrest.

Issue 3

It was inferred by the plain reading of Section 35 of FERA or Section 104 of the Custom’s Act that the enforcement officer or customs officer is not a police officer nor is the person arrested by any of them is yet an accused triable by a Magistrate having jurisdiction or an accused to be committed for trial at that stage. Further it could also be inferred that neither the Officer of Enforcement nor the Customs Officer is empowered with the power of investigation as contemplated under Chapter XII of the Code or under any specific provisions of the special laws.

However the Supreme Court in its judgement stated that it is essential to focus attention on the task of proper application of the concerned law by ascertaining the purposeful meaning of the language deployed and the spirit with which the legislature has aimed and not merely give a strict reading to the statute.[viii]

Lord Denning in Seaford Court Estates Ltd v. Asher[ix] stated “If a defect appears a judge cannot simply fold his hands and blame the draftsman. He must set to work on the constructive task of finding the intention of Parliament and then he must supplement the written word so as to give ‘force and life’ to the intention of the legislature.” Similar view was also adopted in India in the case of M. Pentiah v. Muddala Veeramallappa[x] .The Supreme Court in this particular case has given a broad explanation of term ‘police officer’ and for the delivery of justice it should be held essential that mere strict interpretation of the provision should not be done . Rather, the intention of the legislature should also be given due importance.

Verdict

The Supreme Court held that sub-sections (1) and (2) of Section 167 are squarely applicable with regard to the production and detention of a person arrested under the provisions of Section 35 of FERA and Section 104 of Customs Act and that the Magistrate has jurisdiction under Section 167(2) to authorise detention of a person arrested by any authorised officer of the Enforcement under FERA and taken to the Magistrate in compliance of Section 35(2) of FERA.

Conclusion

The judgement given in the present case is absolutely valid. It is important that the intention of the legislature should be put to forefront rather than by going by strict interpretation of the laws. Supreme Court is right in holding that it is essential to focus our attention on the task of proper application of the concerned law by ascertaining the purposeful meaning of the language deployed and the spirit with which the legislature has aimed and not merely give a strict reading to the statute.

Edited by Kudrat Agrawal

[i] Hereafter referred as CrPC.

[ii] AIR 1987 SC 2257.

[iii] Ratanlal & Dhirajlal The Code of Criminal Procedure, 1972 ,20th Edn. Lexis Nexis.

[iv]  http://indiankanoon.org/doc/1109803/.

[v] http://indiankanoon.org/doc/1771476/.

[vi] Mahadayal v. C.T.O , AIR 1958 S.C. 667.

[vii] C.C.E v. Standard Motor Products, AIR 1989 SC 1298.

[viii] Maxwell , Interpretation of Statutes, Tenth Edn. P.g. 229.

[ix]  [1949] 2 KB 481.

[x] (1961) 2 SCR 295: AIR 1961 SC 1107.

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