Facts of the Case

The petitioner, Mukesh Kumar, sought bail in connection with Special Case No. 344 (C) of 2022 arising out of Unit Case No. 01 of 2022-23, registered for alleged offences under Sections 135(1)(a) and 135(1)(b) of the Customs Act, 1962.

The petitioner had been in custody since 5 April 2022.

The allegation against the petitioner was that gold bars/bullions of foreign origin, together with various types of jewellery, were recovered from a secret cavity in a car in which the petitioner was travelling with other co-accused persons.

The total value of the seized gold was alleged to be:

Rs. 2,08,55,633/- (Rupees Two Crore Eight Lakh Fifty-Five Thousand Six Hundred Thirty-Three).

It was further alleged that the apprehended persons, including the petitioner, admitted their involvement and possession over the recovered gold bars/bullions and various types of jewellery, which were alleged to have been smuggled from Dubai, UAE, into India.

The petitioner disputed the prosecution case and sought bail on the basis of his asserted limited role, the alleged ownership claim of the co-accused over the seized goods, absence of awareness regarding the secret consignment, parity-related circumstances, clean antecedents, and completion of investigation.

Issues Involved

  1. Whether the petitioner should be granted bail in a prosecution under Sections 135(1)(a) and 135(1)(b) of the Customs Act, 1962 involving alleged recovery of foreign-origin gold bars/bullions and jewellery valued at approximately Rs. 2.08 crore.
  2. Whether the petitioner’s mere presence in the jointly occupied car was sufficient, at the bail stage, when the key to the secret cavity/compartment was made available by co-accused Sacchu Prasad.
  3. Whether the claim of co-accused Sacchu Prasad over the seized gold bars/bullions and jewellery was a relevant circumstance for considering the petitioner’s bail application.
  4. Whether the allegation that the seized gold had been smuggled from Dubai was weakened, for bail purposes, by the petitioner’s submission that his entry into Bihar was from Kolkata and not through an international border.
  5. Whether the grant of bail to co-accused Sacchu Prasad in Criminal Miscellaneous No. 34824 of 2022 dated 30 August 2022 was a relevant circumstance.
  6. Whether the petitioner’s custody since 5 April 2022 and completion of investigation justified release on bail.
  7. Whether bail could be granted subject to the statutory conditions laid down under Section 437(3) of the Cr.P.C.

Petitioner’s Arguments

Learned Senior Counsel Mr. S.D. Sanjay, appearing for the petitioner, submitted that the entire alleged recovered gold bars/bullions and jewellery belonged to co-accused Sacchu Prasad.

It was argued that Sacchu Prasad was:

  • a renowned goldsmith;
  • engaged in wholesale and retail business of gold jewellery;
  • carrying on business in partnership under the name M/s Suresh Jewellers;
  • operating through a firm duly registered under the GST Act with a valid GST registration number; and
  • also registered under the Bihar Shops and Establishment Act.

The petitioner further argued that the allegation of smuggling from Dubai was without basis because, according to the prosecution case, the petitioner’s entry into the territory of Bihar was from Kolkata and not from any international border.

It was submitted that the petitioner himself was a goldsmith engaged in the same line of business and had accompanied co-accused Sacchu Prasad in the same car for exploring the business market.

A significant argument raised on behalf of the petitioner was that the key to the secret cavity/compartment in the car, from which the alleged gold bars/bullions and jewellery were recovered, had been made available by co-accused Sacchu Prasad.

The petitioner relied upon the fact that Sacchu Prasad had already been granted bail by a Co-ordinate Bench of the Patna High Court through:

Criminal Miscellaneous No. 34824 of 2022, order dated 30 August 2022.

On this basis, it was argued that the petitioner was not aware of the alleged consignment of gold bars/bullions and jewellery.

The petitioner further submitted that:

  • he was running his own jewellery shop at Bakerganj, Patna;
  • the shop was operating under the name and style of M/s Rukhmani Jewellers;
  • he had clean antecedents;
  • investigation in the case had been completed; and
  • there was no possibility of tampering with the evidence.

Respondent’s Arguments

Learned Senior Standing Counsel appearing on behalf of the Union of India opposed the prayer for bail.

However, the order records two significant concessions on behalf of the Union of India/DRI:

  • the claim over the seized gold bars/bullions and other types of jewellery had been made by co-accused Sacchu Prasad; and
  • the car in question was jointly occupied by other co-accused persons.

These concessions formed part of the factual circumstances considered by the High Court while deciding the bail application.

Court Order / Findings

The Patna High Court considered the facts and circumstances of the case.

The Court specifically took into account that:

  • the key to the secret cavity/compartment from which the alleged gold bars/bullions and other types of jewellery were recovered had been made available by co-accused Sacchu Prasad;
  • the petitioner had remained in custody since 5 April 2022; and
  • investigation in the case had been completed.

Considering these circumstances together, the High Court directed that the petitioner be released on bail in connection with Special Case No. 344 (C) of 2022 arising out of Unit Case No. 01 of 2022-23.

The bail was granted upon furnishing:

Bail bond of Rs. 10,000/- with two sureties of the like amount each

to the satisfaction of the learned Special Judge, Economic Offences, Patna/concerned Court.

The release was made subject to the conditions laid down under Section 437(3) of the Cr.P.C.

Important Clarification

The order is a bail order and not a final adjudication on the petitioner’s guilt or innocence.

The High Court did not finally hold that:

  • the seized gold was legally imported;
  • the gold was not of foreign origin;
  • no smuggling had taken place;
  • the allegation concerning Dubai was false;
  • the petitioner had no knowledge of the alleged consignment;
  • the recovered goods conclusively belonged to co-accused Sacchu Prasad; or
  • offences under Sections 135(1)(a) and 135(1)(b) of the Customs Act, 1962 were not made out.

The Court granted bail after considering the circumstances specifically recorded in the order, particularly the role of co-accused Sacchu Prasad in making available the key to the secret cavity/compartment, the petitioner’s custody since 5 April 2022, and completion of investigation.

Therefore, the order should be understood strictly as a determination concerning release on bail and not as an acquittal or final determination of the prosecution case.

Sections and Legal Provisions Involved

  • Section 135(1)(a) of the Customs Act, 1962 – Offence provision invoked in the prosecution relating to evasion/prohibited goods and conduct punishable under Section 135.
  • Section 135(1)(b) of the Customs Act, 1962 – Offence provision invoked concerning possession, carrying, keeping, concealing, selling, purchasing or otherwise dealing with goods in the circumstances contemplated by the statutory provision.
  • Section 437(3) of the Code of Criminal Procedure, 1973 – Conditions governing release on bail.
  • The order also records the petitioner’s submissions concerning GST registration of a co-accused’s jewellery firm and registration under the Bihar Shops and Establishment Act; however, these registrations were part of the factual submissions and were not the substantive penal provisions under which the petitioner was prosecuted.

Link to download the order - https://mytaxexpert.co.in/uploads/1783505000_1535compressed.pdf

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