U/S 137 Customs Act Sanction Not Required for Prosecution for Charges Under the Prevention of Corruption Act: Supreme Court of Karnataka

The Karnataka High Court has ruled that a penalty under Section 137 of the Customs Act, to prosecute an officer of the Customs Department, charged under the offenses punishable under the Prevention of corruption, is not necessary.

It observed that the sanction granted under section 19 of the Prevention of Corruption Act was sufficient.

A single bench of judges of Justice Dr. HB Prabhakara Sastry denied the motion filed by a certain George Varghese challenging the CBI Special Court’s order dismissing his request for release.

The petitioner was charged with the offenses punishable under Section 120B read with Sections 420, 467, 468 and 471 of the Indian Penal Code 1860 and under Section 13(2) read with Section 13( 1)(d) of the Prevention of Corruption Act, 1988.

It is alleged by the CBI that the Claimant, while acting as a civil servant, as Superintendent of Customs, entered into a criminal conspiracy with the Customs Inspector and the CEO of M/s. Amisha International (also accused) in January 2003 and following this, cleared a container carrying goods for export by the company, without physically checking the same, causing undue loss to the Indian government, up to Rs .26,94,251/- and unjustified gain corresponding to themselves.

The petitioner argued that at the time of the alleged offenses he was working in the customs service and therefore a penalty order under section 137 of the Customs Act was required to become aware of them.

Results:

The bench referred to Section 137 of the Customs Act and stated:

Reading the above article would show that it is the Chief Commissioner of Customs or Commissioner of Customs who is the authority to grant the sanction. However, such penalty under Section 137(1) of the Customs Act is only required for offenses referred to in Section 132, Section 133, Section 134, Section 135 or in article 135-A of the customs law.

He added,

In the present case, of course, the offenses with which the present applicant is charged are punishable under Articles 120B, 420, 467, 468 and 471 of the CPI and under Article 13 (2) read with Article 13 (1) (d) the Prevention of Corruption Act. Thus, none of the infringements of Articles 132, 133, 134, 135 or 135-A of the customs law has been attributed to the applicant in this case. Consequently, the sanction does not have to be imposed under Article 137 of the Customs Law.

Referring then to section 19(1)(c) of the Prevention of Corruption Act, the bench said,

The penalty imposed under section 19(1)(c) for the offense punishable under section 13(2) read with section 13(1)(d) of the Prevention of corruption, cannot be qualified as an invalid sanction in the eyes of the law.

The petitioner had also argued that the sanctioning authority (Excise Commissioner) was not the competent authority to issue the sanction, since the petitioner was in office at the date of the offenses in the Customs Department. It was argued that the two departments have a separate commissariat and that the services of officers and officials of these two departments cannot be exchanged. Thus, the sanction granted by the Excise Commissioner is an invalid sanction.

The bench considered the Petitioner’s service records relied upon by the prosecution to show that the Petitioner was originally appointed to the Excise Department, but as of the date of the alleged offenses held the post of superintendent in the Department. customs. However, as at the date of sanction he was returned to the Excise Department, as such it was the Excise Commissioner who had the power/authority to remove the petitioner, thus the penalty was granted by the Central Excise Commissioner.

It said,

“The fact remains that the applicant joined the services in 1974 at the Central Excise Department and retired from the Central Excise Department in 2011, although in the meantime he was transferred or forced to work as Superintendent of Customs, but he did not contest the said surrender or delegation or transfer by any name. It was only when the question of the penalty to prosecute him under the provisions of the Prevention of corruption has arisen, that he cannot convey said assertion that the Customs Department has a separate Commissariat.”

Finally, relying on the judgment of the Supreme Court in the case CBI & Ors. Versus. Pramila Virendra Kumar Agarwal, the Court said:The absence of sanction can undoubtedly be raised at the threshold but the invalidity of the sanction is to be raised during the trial.

Case Title: George Varghese v. Superintendent of Police

Case No.: PETITION FOR CRIMINAL REVIEW NO. 1193 OF 2012

Citation: 2022 LiveLaw (Kar) 301

Date of Order: JULY 15, 2022 Appearance: Lead Counsel Kiran S. Javali, for Attorney Chandrashekara K for Petitioner; Special Public Prosecutor P. Prasanna Kumar for Respondent

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