# DIRECTORATE OF ENFORCEMENT v. DEEPAK MAHAJAN AND ANR

- **Citation:** [1994] 1 S.C.R. 445
- **Court:** Supreme Court of India
- **Decided:** 1994-01-31
- **Case number:** Criminal Appeal No. 537of1990
- **Bench:** S. Ratnavel Pandian, K. Jayachandra Reddy
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/directorate-of-enforcement-v-deepak-mahajan-and-anr-12108
- **Pages:** 54

## Headnote

B
Criminal Procedure Code 1973: Sections 167(1) and (2)--Person arrested under Special Act viz. FERA or Customs Act and produced before a
Magistrate-Jurisdiction to authorise detention-Held : Magistrate has the
jurisdiction under S. 167(2)-ATTest and custody-Distinction between-ATTest C
condition precedent to judicial custody-Object and applicability of S.
167( 1)-AlTest need not be by Police Officer alone-'Police Officer' includes
authorised or empowered officer under special Acts like FERA/Customs Act.
Foreign Exchange Regulation Act, 1993/Customs Act, 1962-S.
35(2 )1104(2 )--Procedure under s. 167 Cr. P. C.-Whether attracted after a1Test D
of a person under FERA/Customs Ac~Jurisdiction of Magistrate to authorise
detention u/s. 167(2) Cr. P.C.
Interpretation of Statutes-Subsidiary Rules--l'rovisions to be constmed to jUrther the ends of justice and not to fmstrate the same-Legislative E
intent-To remove the difficulties courts can mould and creatively interpret
the provisions-Can consider the object and purpose of the enactmen~an
adopt jUnctional approach and go behind the words and also consider other
factors to ascertain the legislative intent.
Words & Phrases: 'Accused'-'AlTest'-'Person arrested' 'Police F
Officer'-'Diary'-'/nvestigation'-Meaning of in the context of S. 167 Cr.
P.C./S. 35(2) of FERA/S. 104(2) of Customs Act.
Respondent No. 1 was arrested by the officers of the Enforcement
Directorate for an offence punishable under the pro\'isions of Foreign G
Exchange Regulation Act (FERA) and produced before the Magistrate. An
application under S.167(2) Cr.P.C. was moved by the Enforcement Officer
seeking the petitioner's detention under judicial custody on the ground
that it was necessary to complete the investigation. The respondent moved
the Court for bail but was not successful. He challenged the jurisdiction
of the Magistrate in authorising his detention and its extensions. His plea H
445
446
SUPREME COURT REPORTS
[1994) _1 S.C.R.
A was rejected on the basis of the decision in Union of India v. O.P. Gupta
and Ors., (1990) 2 Delhi Lawyer 23(FB) by a three Judges Bench, reversing
the decision of a Division Bench in Dhalam Chand Baid v. Union of India
Ors., (1982) Crl. Law Journal 747 which held that a Magistrate had no
power to remand a person accused of an offence punishable under FERA
B
to judicial custody.
The order of the Magistrate was challenged before the High Court.
A Division Bench heard the matter and referred it to a three Judges Benr.h
which in turn referred it to a five-Judges B~nch since Gupta's case was
decided by a three-Judges Bench. The five Judges Bench by majority
C O\'er-ruled the decisions in Gupta's case and held that the Magistrate had
no power to remand a person produced before him in accordance with S.
35(2) ofFERA.
The said decision has been challenged in the present appeal.
D
Allowing the appeal, this Court
HELD : 1. 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 Foreign Exchange Regulation
Act (FERA) and S.104 of Customs Act and that the Magistrate has
E 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. [498-A-B]
F
Union of India v. O.P. Gupta and Others, (1990) 2 Delhi Lawyer 23
(FB), affirmed.
Dhalam Chand Baid v. Union of India and Ors., (1982) Crl. Law
Journal 747, overruled.
Chaganti Satyanarayana and Others v. State of Andhra Pradesh, AIR
G (1986) SC 2130 = [1986] 2 SCR 1128, referred to.
2.1. A conjoint reading of Sections 57 and 167(1) and (2) Cr.P.C.
barring the provisos to sub-section (2), manifestly shows that the legislature has contemplated that the investigation of the offence in case of a
person arrested without a warrant should be completed in the first inH stance within twenty four hours and if the inves

## Text

_Characters 0–39,707 of 123,613. This is a partial read: ask again with offset=39707 for what follows._

:
DIRECTORATE OF ENFORCEMENT
A
v.
DEEPAK MAHAJAN AND ANR.
JANUARY 31, 1994
[S. RATNAVEL PANDIAN AND K. JAYACHANDRA REDDY, JJ.]
B
Criminal Procedure Code 1973: Sections 167(1) and (2)--Person arrested under Special Act viz. FERA or Customs Act and produced before a
Magistrate-Jurisdiction to authorise detention-Held : Magistrate has the
jurisdiction under S. 167(2)-ATTest and custody-Distinction between-ATTest C
condition precedent to judicial custody-Object and applicability of S.
167( 1)-AlTest need not be by Police Officer alone-'Police Officer' includes
authorised or empowered officer under special Acts like FERA/Customs Act.
Foreign Exchange Regulation Act, 1993/Customs Act, 1962-S.
35(2 )1104(2 )--Procedure under s. 167 Cr. P. C.-Whether attracted after a1Test D
of a person under FERA/Customs Ac~Jurisdiction of Magistrate to authorise
detention u/s. 167(2) Cr. P.C.
Interpretation of Statutes-Subsidiary Rules--l'rovisions to be constmed to jUrther the ends of justice and not to fmstrate the same-Legislative E
intent-To remove the difficulties courts can mould and creatively interpret
the provisions-Can consider the object and purpose of the enactmen~an
adopt jUnctional approach and go behind the words and also consider other
factors to ascertain the legislative intent.
Words & Phrases: 'Accused'-'AlTest'-'Person arrested' 'Police F
Officer'-'Diary'-'/nvestigation'-Meaning of in the context of S. 167 Cr.
P.C./S. 35(2) of FERA/S. 104(2) of Customs Act.
Respondent No. 1 was arrested by the officers of the Enforcement
Directorate for an offence punishable under the pro\'isions of Foreign G
Exchange Regulation Act (FERA) and produced before the Magistrate. An
application under S.167(2) Cr.P.C. was moved by the Enforcement Officer
seeking the petitioner's detention under judicial custody on the ground
that it was necessary to complete the investigation. The respondent moved
the Court for bail but was not successful. He challenged the jurisdiction
of the Magistrate in authorising his detention and its extensions. His plea H
445
446
SUPREME COURT REPORTS
[1994) _1 S.C.R.
A was rejected on the basis of the decision in Union of India v. O.P. Gupta
and Ors., (1990) 2 Delhi Lawyer 23(FB) by a three Judges Bench, reversing
the decision of a Division Bench in Dhalam Chand Baid v. Union of India
Ors., (1982) Crl. Law Journal 747 which held that a Magistrate had no
power to remand a person accused of an offence punishable under FERA
B
to judicial custody.
The order of the Magistrate was challenged before the High Court.
A Division Bench heard the matter and referred it to a three Judges Benr.h
which in turn referred it to a five-Judges B~nch since Gupta's case was
decided by a three-Judges Bench. The five Judges Bench by majority
C O\'er-ruled the decisions in Gupta's case and held that the Magistrate had
no power to remand a person produced before him in accordance with S.
35(2) ofFERA.
The said decision has been challenged in the present appeal.
D
Allowing the appeal, this Court
HELD : 1. 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 Foreign Exchange Regulation
Act (FERA) and S.104 of Customs Act and that the Magistrate has
E 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. [498-A-B]
F
Union of India v. O.P. Gupta and Others, (1990) 2 Delhi Lawyer 23
(FB), affirmed.
Dhalam Chand Baid v. Union of India and Ors., (1982) Crl. Law
Journal 747, overruled.
Chaganti Satyanarayana and Others v. State of Andhra Pradesh, AIR
G (1986) SC 2130 = [1986] 2 SCR 1128, referred to.
2.1. A conjoint reading of Sections 57 and 167(1) and (2) Cr.P.C.
barring the provisos to sub-section (2), manifestly shows that the legislature has contemplated that the investigation of the offence in case of a
person arrested without a warrant should be completed in the first inH stance within twenty four hours and if the investigation cannot be com-
·.
DIRECTORATE OF ENFORCEMENT v. DEEPAK
447
pleted within that period, then the Magistrate can authorise the detention A
of the accused in such custody as he thinks fit for a term not exceeding 15
days. [468-G, H; 469-A]
2.2. Proviso a(i) and (ii) of Section 167(2) empowers the magistrate to
authorise the detention of the accused person otherwise than in the custody
of the police beyond the period of fifteen days, if the Magistrate is satisfied B
that adequate grounds exist for doing so, but no Magistrate can authorise
the detention of the accused person in custody for a total period exceeding
ninety days or sixty days as the case may be. If the investigation is not
completed within the prescribed period, the accused is entitled to bail as
embodied in the statute itself, provided the accused person is 'prepared to C
and does furnish bail' and the person released on bail under Section 167(2)
of the Code should be deemed to have been so released under the provisions
of Chapter XXXII for the purposes of that Chapter. [ 469-H; 470-A-C]
Hussainara Khatoon v. State of Bihar, [1979] 3 SCR 169 and Khatri
and Others v. State of Bihar and Others, [1981] 1 SCC 627, relied on.
D
A. Lakshmanrao v. Judicial Magistrate, Parvatipuram, [1970) 3 SCC
501; Gouri Shankar Iha v. The State of Bihar, [1972) 1 SCC 564 and Natabir
Parida v. State of Orissa, [1975] 2 SCC 220, referred to.
3. Though Section 167(1) refers to the investigation by the police and E
the transmission of the case diary to the nearest Magistrate as prescribed
under the Code etc., the main. object of sub-section(l) of Section 167 is the
production of an arrestee before a Magistrate within twenty-four hours as
fixed by Section 57 when the investigation cannot be completed within that
period so that the Magistrate can take further course of action as conF
templated under sub-section (2) of Section 167. [471-A-B]
4. Cr.P.C. gives power of arrest not only to a police officer and a
Magistrate but also under certain circumstances or given situations to
private persons. Further, when an accused person appears before a
Magistrate or surrenders voluntarily, the Magistrate is empowered to take G
that accused person into custody and deal with him according to law.
Arrest of a person is a condition precedent for taking him into judicial
custody. In every arrest, there is custody but not vice-versa and that both
the words 'custody' and 'arrest' are not synonymous terms. Though
'custody' may amount to an arrest in certain circumstances but not under H
448
SUPREME COURT REPORT~
[1994] 1 S.C.R.
A all circumstances. If these two terms are interpreted as synonymous, it is
nothing but an ultra legali!'lt interpretation which if under ~di circumstances accepted and adopted, would lead to a startling anomaly resulting in
serious consequences. [472-E-G]
B
c
Roshan Beevi v. Joint Secretary,Govemment of Tamil Nadu, (1985)
Crl. L.J. and Niranjan Singh and Another v. Prabhakar Rajaram Kharote
and Others, [1980) 2 SCC 559, referred to.
New Encyclopedia Britanica, Halsbury's Laws of England, '.A Dictionary of Law' by L.B. Curzon, Black's Law Dictionary, referred to.
5. To invoke Section 167(1), it is not an indispensable pre-requisite
condition that in all circumstances, the arrest should have been effected
only by a police officer and none else and that there must neces~arily be ·
records of entries of a case diary. Therefore, it necessarily follows that a
mere production of an arrestee before a competent magistrate by an
D authorised officer or an officer empowered to arrest on a reasonable belief
that the arrestee " has been guilty of an offence punishable" under the
provisions of the special Act is sufficient for the Magistrate to take that
person into his custody ·on his being satisfied of the three preliminary
conditions, namely, (1) the arresting officer is legally competent to make
E
the arrest; (2) that the particulars of the offence or the accusation for
which the person is arrested or other grounds for such arrest do exist and
are well-founded and (3) that the provisions of the special Act in regard
to the arrest of the person and the production of the arrestee serve the
purpose of Section 167(1) of the Code. (474-A-D]
F
Gurbaksh Singh Sibbia etc. v. State of Punjab, [1980) 3 SCR 383, relied
on.
6. The word 'accused' or 'accused person' is used only in a generic
sense in Sections 167(1) and (2) denoting the "person" whose liberty is
G actually restrained on his arrest by a competent authority on well-founded
information or formal accusation or indictment. Therefore, the word
'accused' limited to the scope of Sections 167(1) and (2) ·particularly in
the light of Explanation to Section 273 of the Code includes 'any person
arrested'. The inevitable consequence that follows is that 'any person is
arrested' occurring in the first limb of Section 167(1) of the Code takes
H within its ambit 'every person arrested' under Section 35 of FERA or S.
DIRECTORATE OF ENFORCEMENT v. DEEPAK
449
104 of the Customs Act also as the case may be and the 'person arrested' A
can be detained by the Magistrate in exercise of his power under Section
167(2) of the Code. Thus, the 'person arrested' under FERA or Customs
Act is assimilated with the characteristics of an 'accused' within the range
of Section 167(2) and as such liable to be detained under Section 167(2)
by a Magistrate when produced before him. [485-G-H; 486-A-B]
Ramesh Chandra Mehta v. State of West Bengal, AIR (1970) SC 940
= [1969) 2 SCR 461; Illias v. Collector of Customs, Madras, AIR (1970) SC
1065; M.P. Shanna and Others v. Satish Chandra, District Magistrate, Delhi
and Others, [1954) SCR 1077; Raja Narayan/al Bansilal v. Maneck, [1961)
B
1 SCR 417; State of Bombay v. Kathi Kalu Oghad, [1962) 3 SCR 10; Nandini C
Satpathy v. P.L. Dani and Another, (1978) 2 424; Veera Ibrahim v. State of
Maharashtra, [1976) 2 SCC 302; Poolpandi and Others v. Superintendent,
Central Excise and Others, [1992) 3 SCC 259; Percy Rustomji Basta v. State
of Maharashtra, [1971) 1SCC847 and Raman/al Bhogilal Shah and Another
v. D.K Guha and Others, [1973] 1 SCC 696, distinguished.
C./. U. Cochin v. P.K Ummerkutty, (1983) Crl.L.J. 1860; N.K Ayoob
v. 17ie Superintendent, C./. W, Cochin, (1984) Crl.L.J. 949; N.H. Dave v.
Mohamed Akhtar (1984) 15 E.L.T. 353 and Senior Intelligence Officer v.
M.KS. Abu Bucker, (1989) L.W. (Crl.) 325, approved.
Re Kora Ayyappa and Another, Cr.L.J. 11 (1910) Page 251, referred to.
7. There is no imponderability in construing Section 35(2) of FERA
D
E
4.
and Section 104(2) of Customs Act that the said provisions replace Section
167(1) and serve as a substitute thereof substantially satisfying all the F
required basic: conditions contained therein and that consequent upon such
replacement of sub-section(l) of Section 167, the arrested person under
those special Acts would be an accused person to be detained by the
Magistrate under sub-section(2) of Section 167. There is no expression
'police officer' deployed in Section 167(1) nor does it appear in any part of
Section 167 (2). The authority for detaining a person as contemplated under G
Section 167 (2) is in aid of investigation to be carried on by any prosecuting
agency who is invested with the power of investigation. [488-B-C]
Union of India v. O.P. Gupta and Others, (1990) 2 Delhi Lawyer
23(FB), affirmed.
H
450
SUPREME COURT REPORTS
[1994) 1 S.C.R.
A
8.1. Sub-section(l) of Section 167 speaks of the arrest by a police ·
B
officer and the follow up investigation by him. Section 35(1) of FERA and
~
Section 104(1) of the Customs Act empower the authorised officer under
the relevant provisions to effect arrest of a person against whom there is
reason to believe that he has been guilty of an offence under the respective
concerned Acts. [ 489-F]
;
:·.
8.2. Neither the Police Act, 1861 nor any other statute defines the
expression 'Police Ofticer'. Shortly stated, the main duties of the police are
the prevention, detention and investigation of crimes. As the powers and
~
duties of the State have increased and are increasing manifold, various
C ,Acts dealing with Customs, Excise, Forest, Taxes etc. have come to be
passed and consequently the prevention, detention and investigation of
offences as prescribed under those Acts have come to be entrusted to
officers with different nomenclatures appropriate to the subject with ref·
erence to which they function. Though the powers of customs officers and
D enforcement officers are not identical to those of police officers quo the
investigation under Chapter XII of the Code yet the officers under the
FERA and Customs Act are vested with certain powers similar to the
powers of police officers. [489-G-H; 490-A-B]
8.3. Though an authorised officer of Enforcement or Customs is not
E
undertaking an investigation as contemplated under Chapter XII of the
Code, yet those officers are enjoying some analogous powers such as
arrest, seizure interrogation etc. Besides, a statutory duty is enjoined on
them to inform the arrestee of the grounds for such arrest as contemplated
under Article 22(1) of the Constitution and Section 50 of the Code.
F
G
Therefore, they have necessarily to make records of their statutory functions show-ing the name of the informant, as well as the name of the person
who violated any other provision of the Code and who has been guilty of
an offence punishable under the Code, nature of information received by
them, time of the arrest, seizure of the contraband if any, and the state·
ments recorded during the course of the detection of the offence/offences.
[490-D-E]
9. The expression 'Diary' referred to in Section 167(1) of the Code is
the special diary mentioned in Section 167 (2) which should contain full
and unbridged statements of persons examined by the police so as to give
the Magistrate on a perusal of the said diary, a satisfactory and complete
H source of information which would enable him to decide whether or not
DIRECTORATE OF ENFORCEMENT v. DEEP AK
451
the accused person should-be detained in custody but it is different from A
the general dtary maintained under Section 44 of the Police Act. [490-C]
10. The police officer after consummation of the investigation files a
report under Section 173 of the Code upon which the Magistrate may take
cognizance of any offence disclosed in the report under Section 190(l)(b)
of the Code whereas the empowered or authorised officer of the special
Acts has to file only a complaint of facts constituting any offence under
the provisions of the Act on the receipt of which the Magistrate may take
cognizance of the said offence under Section 190(1) (a) of the Code. After
taking cognizance of the offence either upon a police report or upon
receiving a complaint of facts, the Magistrate has to proceed with the case
B
c
as per the procedure prescribed under the Code or under the S!Jecial
procedure, if any, prescribed under the special Acts. Therefore, the word
'investigation' cannot be limited only to police investigation but on the
other hand, the said word is of wider connotation and flexible so as to
include the investigation carried on by any agency whether be be a police
officer or empowered or authorised officer or a person not being a police D
officer or empowered or authorised officer or a person not being a police
officer under the direction of a Magistrate to make an investigation vested
with the power of investigation. [ 492-C-F]
N.H. Dave, Inspector of Customs v. Mohmed Akhtar, (1984) 15 E.L.T. E
353(Guj.); H.N. Rishbud v. State of Delhi, [1955] 1SCR1150 and State of
M.P. v. Mubarak Ali, [1959] Supp. 2 SCR 201, relied on.
Ramesh Chandra v. The State of West Bengal, [1969] 2 SCR 461; lllias
v. Collector of Customs, Madras, [1969] 2 SCR 613; State of Punjab v. Barkat
Ram, [1962] 3 SCR 338 and Badaku Jyoti Savant v. State of Mysore, [1966]
3 SCR 698, distinguished.
F
11. The word 'investigation' though is not shown in any one of the
sections of the Customs Act, certain powers· enjoyed by the police officer
during the investigation are vested on the specified officer of customs. It G
cannot, therefore, be said that either the Officer of Enforcement or the
Customs Officer is not empowered with the power of investigation though
not with the power of filing a final report as in the c&se of a police officer.
[493-F-G]
12. The combined operation of Sections 4(2) and 26(b) of the Code H
452
SUPREME COURT REPORTS
[1994] 1 S.C.R.
A
is that the offence complained of should be investigated or inquired into
or tried according to the provisions of the Code where the enactment which
creates the offence, indicates no special procedure. [ 494-C]
B
13. Section 4 is comprehensive and Section 5 is not in derogation of
Section 4(2) and it only relates to the ext«;l!t of application of the Code in
the matter of territorial and other jurisdiction but does not nullify the
effect of Section 4(2). In short, the provisions of this Code would be
applicable to the extent in the absence of any contrary provision in the
Special Act or any special provision excluding the jurisdiction or ap·
plicability of the Code. In fact, the second limb of Section 4(2) itself limits
C the application of the provisions of the Code. [496-B-C]
Viswa Mitter of Vijay Bharat Cigarette Stores v. O.P. Poddar, [1983) 4
SCC 701 and A.R. Antulay v. Ramdas Sriniwas Nayak, [1984) 2 SCR 914,
relied on.
D
14. The operation of Section 4(2) of the Code is straightway attracted
E
to the area of investigation, inquiry and trial of the offences under the
special laws including the FERA and Customs Act and consequently
Section 167 of the Code can be made applicable during the investigation
or inquiry of an offence under the special Acts also inasmuch as there is
no specific provision contrary to that excluding the operation of Section
167. [497-C]
Bhim Singh v. State of U.P., AIR (1955) SC 435 and Delhi Administration v. Ram Singh, (1962) 2 SCR 694, relied on.
F
15. A Magistrate before whom a person arrested by the competent
authority under the FERA or Customs Act is produced, can authorise
detention in exercise of his powers under Section 167 Cr.P.C. Otherwise
the mandatory direction under the provisions of Section 35(2) of FERA or
104(2) of the Customs Act, to take every person arrested before the
Magistrate without unnecessary delay when the arrestee was not released
G on bail under sub-section(3) of those special Acts, will become purposeless
and meaningless and to say that the Courts even in the event of refusal of
bail have no choice but to set the person arrested at liberty by folding their
hands as a helpless spectator in the face of what is termed as 'legislative
causes omissus' or legal flaw or lacuna, it will become utterly illogical and
H absurd. (497-F-Gl
DIRECTORATEOFENFORCEMENT v. DEEPAK
453
16. Though the function of the Courts is only to expound the law and A
not to legislate, nonetheless the legislature cannot be asked to sit to resolve
the difficulties in the implementation of its intention and the spirit of the
law. In such circumstances, it is the duty of the .court to mould or
creatively interpret the legislation by liberally interpreting the statute.
[464-CJ
B
17. Normally Courts should be slow to pronounce the legislature to
have been mistaken in its constantly manifested opinion upon a matter
resting wholly within its will and take its plain ordinary grammatical
meaning of the words of the enactment as affording the best guide, but to
winch up the legislative intent, it is permissible for Courts to take into C
account the ostensible purpose and object and the real legislative intent.
Otherwise, -a bare mechanical interpretation of the words and application
of the legislative intent devoid of concept of purpose and object will render
the legislature inane. In cases of this kind, 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 D
of the Courts from authorising the detention of an arrestee whose arrest
was effected on the ground that there is reason to believe 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 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. [466-E-H; 467-A]
E
F
M.Pentiah v. Muddala Veeramallapa, [1961) 2 SCR 395; Bangalore
Water Supply v.A. Rajappa, AIR (1978) SC 548; Chandra Mohan v. State of
Uttar Pradesh and Ors., [1967) 1 SCR 77; Organo Chemical lndustries v.
Union of India, [1980) 1 SCR 69 and Chainnan, Board of Mining ExaminaG
tion and Chief Inspector of Mines and Another v. Ramjee, AIR (1977) SC
965, referred to.
Seaford Courl Estates Ltd. v.Asher, [1949) 2 All ER 155 and Guiseppi
v. Walling, 144F (2d) 608 (CCA 2d, 1944), referred to.
H
454
SUPREME COURT REPORTS
[1994) 1 S.C.R.
A
Maxwell on Statutes (10th Edn.) page 229, relied on.
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No.
537of1990.
From the Judgment and order dated 6-4-1990 of the High Court of
B Delhi in Criminal Writ No. 316/89.
AD. Giri, Solicitor General, K.T.S. Tutsi, Addi. Solicitor General,
A. Subba Rao and C.V.S. Rao for the appellant.
C
K.G. Bhagat, Rajeev Sharma and P.N. Bhan for the respondents.
The Judgment of the Court was delivered by
S. RATNAVEL PANDIAN, J. 1. The salient and indeed substantial
legal question which looms for determination in this appeal may be formuD lated as follows :
Whether a 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
E
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 ?
F
2. As a preclude to the judgment, we would like to state that though
the appellant in the present case has been arrested under sub-section (1)
of Section 35 of Foreign Exchange Regulation Act, 1973 (hereinafter
referred to as the 'FERA') and taken to the Magistrate under sub-section
(2) thereof, we while disposing the legal questions posed for determination,
are inclined to deal with the corresponding provisions under the Customs
G Act also for the reasons - (i) that the scheme .for both the FERA and the
Customs Act is more or less the same; (ii) the provisions relating to the
arrest and production of the arrestee before the Magistrate are identical;
(iii) the arguments by both the parties have been advanced pertaining to
provisions of both the Acts; and .(iv) almost all the decisions cited relate
H to the provisions of both the Acts.
·')--
DIRECTORATEOFENFORCEMENT v. DEEPAK [PANDIAN,J.]
455
3. There is a vertical cleavage of opinion amongst the various High A
Courts on the above legal question which has come up for adjudication in
the present appeal.
'
4. This appeal, by special leave is directed against the judgment of
the High Court of Delhi dated 6th April 1990 rendered by a five-Judges
Bench in Criminal Writ No. 316 of 1989 over-ruling the decision of the
same High Court in Union of India v. O.P. Gupta and Others, (1990) 2
Delhi Lawyer 23 (FB) rendered in Criminal Writ Nos. 104 and 116 of 1984
B
by a three-Judges Bench reversing an earlier decision in Dhalam Chand
Baid v. Union of India and Ors., 1982 Crl. Law Journal 747 which was
decided by a Division Bench of the same High Court holding that a C
Magistrate has no power to remand a person accused of an offence
punishable under the Foreign Exchange Regulation Act, 1973 (hereinafter
referred to as 'FERA') to judicial custody.
5. Though normally, it may not be necessary to make any reference D
about the constitution of a particular Bench which is the prerogative of the
Chief Justice of the High Court concerned, yet regrettably in this case, it
has become unavoidable to make reference concerning the constitution of
the Bench since during the course of the arguments, a diatribe, though not
justifiable was made about the formation pf the Bench, presided over by E
Charanjit Talwar, J who gave a dissenting judgment in the case of O.P.
Gupta.
6. In Gupta's case, the Bench was presided over by Y ogeshwar Dayal,
J (as he then was) and two other learned Judges, namely, Charanjit Talwar
and Malik Sharief-ud-din, JJ of whom Charanjit Talwar, J gave his dissentF
ing judgment.
7. When the decision of Gupta's case was holding the field, the
respondent No.l, namely, Deepak Mahajan was arrested on 13th March
1989 by the officers of the Enforcement Directorate for an offence punish- G
able 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 (hereinafter referred
to as 'the Code') was moved by the Enforcement Officer seeking
petitioner's detention under judicial custody commonly known in the legal H
456
SUPREME COURT REPORTS
(1994) 1 S.C.R.
A
parlance as '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 remanc1ed the first
respondent to judicial custody for fourteen days and subsequently extended
the detention period. The first respondent challenged the jurisdiction of
B
c
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's case. This order of the Magistrate was impugned before
the High Court. The Division Bench of the High Court comprising of
Charanjit Talwar, V.B. Bansal, JJ in the light of the decision of this Court
in Chaganti Satyanarayana and Others v. State of Andhra Pradesh, AIR
(1986) SC 2130 = (1986) 2 SCR 1128 holding that the powers of remand
vested in a Magistrate become exercisable only after an accused is
produced before him in terms of sub-section ( 1) of Section 167 of the Code,
referred the matter by its order dated 12th March 1980 to a larger bench
opining that the law laid down in Gupta's case was no longer a good law
D
and it required re-consideration. The learned Chief Justice of the High
Court on such reference constituted a full Bench comprising of Charanjit
Talwar, J.C. Jain and V.B. Bansal, JJ. This three-Judges Bench after
hearing the matter for sometime expressed their view that the case should
be heard and decided by a five-Judges Bench since the judgment in Gupta's
E
F
case was already decided by a three-Judges Bench. It was under those
circumstances, the Bench was constituted comprising of Charanjit Talwar,
Malik Sharief-Ud-Din, Sunanda Bhandare, P.K. Bahri and R.L. Gupta, JJ.
Thus the said case was heard by a five-Judges Bench.
8. By majority (per Charanjit Talwar, Sunanda Bhandare and P.K.
Bahri, JJ) the decision in Gupta's case has been over-ruled though Malik
Sh~ief-Ud-Din and R.L. Gupta, JJ gave their separate dissenting judgment. The result was that the dictum laid down in Gupta's case to the effect
that there is " power available to a Magistratr- under Section 167 (2) of the
Code to commit to custody a person proquced before him by a Customs
Officer under Section 104 of the Customs Act", has been over-ruled.
G However, the conclusion of Gupta's case that "Section 437 of the Code of
Criminal Procedure does not confer implied power of remand on a
Magistrate" has been upheld.
9. Consequent upon the above dictum by majority, it has been held
H in the present case that the Magistrate has no power to remand a person
DIRECTORATE OF ENFORCEMENT v. DEEPAK [PANDIAN,J.]
457
produced before him in accordance with Section 35 (2) of FERA.
A
10. In this connection, be it noted that the provisions of Section 35
of FERA (which corresponds to Section 19-B of the old FERA (Act VII
of 1947) and sub-section 1 to 3 of Section 104 of the Customs Act are
identical and they do not explicitly lay down the procedure as to haw the ·
Magistrate should deal with an arrestee, when brought before him either B
by the Officer of the Enforcement Directorate or the Customs Officer, as
the case may be.
11. For proper understanding and scrutiny of this rule, let us
reproduce the relevant provisions of Section 35 of FERA and Section 104 C
of the Customs Act.
"Section 35 of FERA
(1) If any officer of Enforcement authorised in this behalf by the
Central Government, by general or special order, has reason to D
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. E
unnecessary ctelay, be taken to a Magistrate.
(3) Where any officer of Enforcement has arrested any person
under sub-section (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).
Section 104 of the Customs Act
(1) If any officer of customs empowered in this behalf by general
or special order of the Collector of Customs has reason to believe
F
G
th11.t any person in India or within the Indian Customs waters has
been guilty of an offence punishable under Section 135, he may
arrest such person and shall, as soon as may be, informed him of H
SUPREME COURT REPORTS
[1994) 1 S.C.R.
A
the grounds for such arrest.
B
c
(2) Every person arrested under sub-section (1) shall, without
unnecessary delay, be taken to a Magistrate.
(3) Where an officer of customs has arrested any person under
sub-section (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 (5of1898), an offence under this Act shall not be
cognizable.
12. Though there is no specific provision in FERA as sub-section ( 4)
D of Section 104 of tJie Customs Act, Section 62 speaks of non-cognizable
offences and that Section reads as follows :
E
F
G
H
"62. Certain officences to be non· congnizable -
Subject to the
provisions of Section 45 and nohvithstanding anything contained
in the Code of Criminal Procedure, 1898 (5 of 1898), an offence
punishable under section 56 shall be deemed to be non-cognizable
within the meaning of that Code."
13. Sub-section (2) of Section 61 restricts a Court in taking cognizance of certain offences and also in cases of certain offences except
under certain conditions. That provision reads thus :
"61. Cognizance of offences .............................................. ..
(2) No Court shall take cognizance -
(i) · of any offence punishable under sub-section (2) of Section 44
or sub-section (1) of Section 58, -
(a) Where the offence is alleged to have been committed by an
officer of Enforcement .not lower in rank than an Assistant
Director of Enforcement, except with the previous sanction
DIRECTORATEOFENFORCEMENT v. DEEPAK [PANDIAN,J.J
459
of tb,e Central Government;
(b) Where the offence is alleged to have been committed by an
officer of Enforcement lower in rank than an Assistant Director of Enforcement, except with the previous sanction of the
Director of Enforcement; or
(ii) of any offence punishable under Section 56 or Section 57,
except upon complaint in writing made by -
(a) the Director of Enforcement; or
A·
B
(b) any officer authorised in writing in this behalf by the Director C
of Enforcement or the Central Government; or
(c) any officer of the Reserve Bank authorised by the Reserve
Bank by a general or special order :
Provided that where any such offence is the contravention of any D
of the provisions of this Act or any rule, direction or order made
thereunder which prohibits the doing of an act without permission,
no such complaint shall be made uitless the person accused of the
offence has been given an opportunity of showing that he had such
permission."
E
14. The key questions that come up for consideration are whether a
Magistrate before whom a person arrested under Section 35 is taken can
detain that arrestee in judicial custody and if not, what the Magistrate is
expected to do? To answer those questions, we have to examine sub-section
(2) of Section 35 of FERA and sub-section (2) of Section 104 of the F
Customs Act which are in pan materia reading :
"Every person arrested under sub-section (1) shall, without unnecessary delay be taken to a Magistrate."
15. Apart from the power of arrest provided under Section 35 of the G
FERA, Section 45 of that Act empowers any police officer not below the
rank of a sub-Inspector of Police, or any other officer of the Central
Government or State Government authorised by the Central Government
in this behalf to enter into any public place and search and also arrest
without warrant any person found therein who is reasonably suspected of H
460
SUPREME COURT REPORTS
[1994] 1 S.C.R.
A having committed or of committing or of being about to commit any
contravention of the provisions of sub-section (1) of Section 8. The procedure to be followed, after effecting such arrest is contemplated under subsection (2) of Section 45 which states that 'where any person is ar;ested
under sub~section (1) by an officer other than-a police officer, such officer
B
shall, without unnecessary delay, take or -send the person arrested before
a Magistrate having jurisdiction or before the officer-in-chaige of a police
station. In this context, a perplexed question arises as to what the
Magistrate or the police officer has to do in case the arrestee under Section
45 (1) of FERA is taken or sent before him? Section 46 lays down the
procedure in respect of foreign exchange or any other goods seized by
C police officers. Though we are not very much concerned, in this case, with
the procedure laid down in Section 46, the fact remains that in the FERA,
the police officers are given some independent authority to act in exercise
of certain provisions of this Act. There is no provision in the Customs Act
similar to Sections 45 and 46 of the of the FERA. However, Section 151
D of Customs Act empowers and requires certain specified officers
enumerated under clauses (a) to (e) to assist officers of Customs in the
execution of the Act. One of the officers enumerated under clause (c) is
'officers of police'. But this section does not empower police officers to
exercise the powers conferred upon customs officers by and under the Act
E
F
G
but only authorises and requires the police officers to assist the customs
officer in the exercise of their powers.
16. The 'proper officer' referred to in various provisions of the
Customs Act, who is to perform any function under the said Act, means
the officer of Customs who is assigned those functiOns by the Board or
Collector of Customs as defined under clause (34) of Section 2 of Customs
Act, but it does not include the Officers of Police or any other Officers
enumerated under Section 151. Therefore, the police officers have no
independent role to play in exercise of the powers under the Customs Act
as in Sections 45 and 46 of the FERA.
17. For the disposal of this appeal, we have to deal with the intendment .and application of various provisions of the FERA particularly Sections 35, 45, 46, Section 104 of Customs Act, Section 68 of the Gold Control
Act and various provisions of the Code of Criminal Procedure in particular
Sections 4 (2), 41, 56, 57, 157 (2), 167 (1)(2), 436, 437 and the allied
H provisions, in the light of the principles of law enunciated by the judicial
DIRECTORATEOFENFORCEMENT v. DEEPAK [PANDIAN,J.]
461
pronouncements of this Court as well as of some High Courts. In fact, in A
the impugned judgment, the High Court also has examined all those
provisions from various angles, but the question would be whether the
interpretation given and the conclusion arrived at by the majority of the
Court below can be sustained?
18. Reverting to the judgment under challenge, Charanjit Talwar, J
in his separate judgment with which Sunanda Bhandare and P .K. Bahri, JJ
have agreed, has given the following reasons for his conclusions. Those
being:
B
(1) Neither an officer of Enforcement nor the Customs Officer C
within the meaning of the provisions of FERA or Customs Act
respectively is a police officer, incharge of a police station or a
police officer making an investigation as contemplated under Section 167(1) of the Code and, therefore, a 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 D
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 under
Section 167(2) of the Code. In other words, the power to arrest a
person coupled with the duty to produce or present him before a E
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.
(2) Neither the Officer of Enforcement authorised under Section
35 of Fera nor the Officer of Customs empowered under Section F
104 is 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.
(3) Neither the Officer of Enforcement nor the Customs Officer G
is empowered with the power of investigation as contemplated
under Chapter XII of the Code or under any specific provisions
of the special laws.
(4) Neither the Officer holding inquiry under the provisions of
FERA or the Customs Act can exercise the power of investigation. H
462
A
B
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SUPREME COURT REPORTS
[1994) 1 S.C.R.
as contemplated under Chapter XII of the Cede by virtue of
Section 4(2) of the Code.
(5) The power conferred on such authorised or empowered Officer
to make arrest of any person on reasonable belief that such person
has been guilty of an offence punishable under the provisions of
FERA or Section 135 of the Customs Act, as the case may be, and
to produce the arrestee before a Magistrate is though similar with
a duty cast on a police officer as under Sections 56 and 57 of the
Code, those officers are not equivalent to police officers with the
power of investigation into the commission of an offence as empowered under Chapter XII of the Code though they are enjoying
the limited power, as given to the officer incharge of a police
station under the Code for the purpose of releasing an arrestee on
bail or otherwise.
19.