Case Note & Summary
The present writ petition before the Bombay High Court arises from an investigation initiated by the Directorate of Revenue Intelligence (DRI) against the petitioner companies, Adani Enterprises Limited and Adani Power Limited, for alleged over-valuation of Indonesian coal imports during the period October 2010 to March 2016. The DRI alleges that the petitioners, acting through subsidiary companies in Singapore and Dubai, overstated the import value of coal to siphon money abroad and claimed higher power tariff compensation, resulting in an over-valuation of approximately Rs.930 crore across 231 consignments. The petitioners are accused of misdeclaring the grade and value of goods, making them liable for confiscation and penalty under Sections 111(m) and 112 of the Customs Act, 1962, and for offences under Sections 132 and 135 of the Act. In the course of investigation, DRI issued summons under Section 108 of the Customs Act seeking documents and information regarding the transactions. The petitioners did not fully cooperate, leading DRI to apply to the Additional Chief Metropolitan Magistrate, Mumbai, under Section 166-A of the Code of Criminal Procedure, 1973, for issuance of Letters Rogatory to authorities in Singapore, UAE, Hong Kong, and British Virgin Islands to secure evidence. The magistrate issued the Letters Rogatory. The petitioners challenged the investigation and the issuance of Letters Rogatory by filing the present writ petition. The primary legal issue framed by the court is whether the DRI can legally and validly conduct an investigation into offences under the Customs Act and resort to Section 166-A CrPC for Letters Rogatory. The petitioners contended that the offences alleged are non-cognizable under Section 104(5) of the Customs Act, as they do not involve prohibited goods or evasion of duty exceeding Rs.50 lakhs. They argued that under Section 4(2) CrPC, the procedure for investigation of non-cognizable offences under Section 155 CrPC must be followed, which requires an order of a magistrate, and that without compliance, the investigation is illegal. They further submitted that Section 166-A CrPC can only be invoked when an investigation is initiated under Chapter XII of the Code, and that the DRI’s actions bypass the statutory safeguards. The petitioners relied on several Supreme Court and High Court decisions to support their stance. The matter was argued by senior counsel for the petitioners and respondents. The court reserved judgment on 2 July 2019. The outcome is not ascertainable from the provided extract.
Issue of Consideration
Whether the Directorate of Revenue Intelligence legally and validly commenced investigation against the petitioner for offences under the Customs Act, 1962, and whether it can resort to Section 166-A of the Code of Criminal Procedure, 1973 for issuance of Letters Rogatory.
Law Points
- Investigation in non-cognizable offences requires compliance with Section 155(2) CrPC
- Section 4(2) CrPC makes procedure in CrPC applicable to investigations under special Acts unless inconsistent
- Section 166-A CrPC can be used only when investigation is under Chapter XII
- i.e.
- after FIR
- Customs Act classifies offences as cognizable/non-cognizable based on nature and value under Section 104
Case Details
2019 LawText (BOM) (10) 95
Criminal Writ Petition No. 3818 of 2018
Ranjit V. More, Bharati Dangre
Mr. Vikram Nankani, Sr. Counsel with Mr. Atul Nanda i/b HKS Legal for the petitioner; Mr. Maninder Singh, Sr. Counsel with Advait M. Sethna, Prabha Bajaj, Tejvir Singh Bhatia i/b Ms. Ruju Thakker for Respondent Nos.1 and 2; Mr. Deepak Thakare, P.P with Mr. S.R. Shinde, APP for the State
Adani Enterprises Limited, Adani Power Limited
Union of India, Directorate of Revenue Intelligence, State of Maharashtra
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Nature of Litigation
Criminal writ petition challenging the investigation initiated by the Directorate of Revenue Intelligence and the issuance of Letters Rogatory for obtaining evidence from foreign jurisdictions.
Remedy Sought
Petitioners seek to quash the Letters Rogatory issued by the Additional Chief Metropolitan Magistrate and to hold the DRI's investigation as illegal.
Filing Reason
DRI commenced investigation into alleged over-valuation of imported Indonesian coal and misdeclaration of value, leading to summons and Letters Rogatory; petitioners allege violation of procedural safeguards under the CrPC and Customs Act.
Previous Decisions
The Additional Chief Metropolitan Magistrate, 8th Court, Mumbai, issued Letters Rogatory to authorities in Singapore, UAE, Hong Kong, and British Virgin Islands on different dates in 2016.
Issues
Whether DRI has legally and validly commenced investigation against the petitioner for offences under the Customs Act, 1962.
Whether DRI can take recourse to Section 166-A CrPC for issuance of Letters Rogatory in the absence of an FIR or compliance with Chapter XII CrPC.
Whether the investigation in non-cognizable offences under the Customs Act requires an order under Section 155(2) CrPC from a magistrate.
Whether the Letters Rogatory issued by the Magistrate without following the procedure under CrPC are valid.
Submissions/Arguments
The investigation pertains to non-cognizable offences under Section 104(5) of the Customs Act, as it does not involve prohibited goods or evasion of duty exceeding Rs.50 lakhs.
Under Section 4(2) CrPC, the procedure for investigation of non-cognizable offences as per Section 155 CrPC must be followed, which mandates a magistrate's order before investigation.
No FIR was registered under Section 154 CrPC, and the investigation was commenced without complying with Chapter XII CrPC.
Section 166-A CrPC can only be invoked when an investigation is initiated under Chapter XII, i.e., after lodging of an FIR.
The Customs Act does not contain any provision excluding the applicability of Section 155 CrPC, and hence the procedure therein must be adhered to.
Reliance placed on various Supreme Court and High Court decisions holding that investigation in non-cognizable cases without a magistrate's order is illegal.
Judgment Excerpts
A pivotal but significant issue which arise in the present Writ Petition is whether the Respondent – Directorate of Revenue Intelligence has legally and validly commenced the investigation against the petitioner into alleged commission of offence punishable under Section 135 of the Customs Act, 1962 and whether or not, based on the said investigation set into motion, it is entitled to take recourse to the provisions of Section 166-A of the Code of Criminal Procedure, 1973 for issuance of the Letter of Rogatory by the Magistrate.
The provision of issuance of Letter of Rogatory contained in Section 166-A of Cr.P.C can be availed of only when the investigation commence under Chapter XII of the Code either in form of Section 154 in respect of cognizable offence or Section 155 in form of non-cognizable offence.
Procedural History
DRI issued requisitions under Section 108 of the Customs Act to the petitioners seeking documents and information. Petitioners did not fully cooperate, asserting that the foreign subsidiaries are independent entities. DRI then applied to the Additional Chief Metropolitan Magistrate, 8th Court, Mumbai, under Section 166-A CrPC for issuance of Letters Rogatory to authorities in Singapore, UAE, Hong Kong, and British Virgin Islands. The magistrate issued the Letters Rogatory on various dates in 2016. The petitioners filed the present writ petition challenging the investigation and the Letters Rogatory.
Acts & Sections
- Customs Act, 1962: 132, 135, 104, 111(m), 112(b)(iii), 114AA
- Code of Criminal Procedure, 1973: 166-A, 154, 155, 4(2)
