Michael Kennedy Vs Commissioner of Customs (Preventive) (Madras High Court)
Summary: The Madurai Bench of the Madras High Court directed the provisional release of a seized Maruti Wagon R VXI BS IV, registration TN-63 AT-1076, on the petitioner depositing ₹1,00,000 as security with the Additional Commissioner. Michael Kennedy challenged the order dated 5 March 2024 rejecting release of the vehicle and ₹5,35,000 cash during an investigation under the Customs Act, 1962 and the Prevention of Money Laundering Act, 2002.
The impugned Customs order recited statements alleging a plan to smuggle 999 grams of gold, valued at ₹59,64,030, and use ₹5,35,000 cash to meet related expenses. These were allegations recorded by Customs, not findings of guilt by the High Court. The Department opposed release because the vehicle could be liable to confiscation and investigation remained pending.
Justice C. Saravanan held that keeping the car idle would serve no useful investigative purpose, as the relevant details were already with Customs, and its value would depreciate. The Court ordered provisional release on ₹1 lakh security, prohibited transfer or alienation without permission of Customs and PMLA authorities, and required production for inspection once every six months pending further orders. The writ petition was disposed of without costs; confiscation proceedings were not decided.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
This Writ Petition is disposed of at the time of admission after hearing the learned counsel for the petitioner and the learned Senior Standing Counsel for the respondents.
2. In this Writ Petition, the petitioner has challenged the impugned order passed by the second respondent/Additional Commissioner, dated 05.03.2024 in his proceedings bearing reference in File No.GEN/ADJ/ADC/417/2024-ADJN DIN-20240381OI000000ACC3
3. By the impugned order, the request of the petitioner for provisional release of the vehicle seized from the custody of the petitioner and the cash has been rejected, on the ground that the investigation is pending for the alleged offences made out by the petitioner under the provisions of Customs Act, 1962 and Prevention of Money Laundering Act, 2002. Relevant portion of the impugned order reads as under:
Extract from the impugned Customs order (scanned pages 3–4):
Please refer your two affidavits referred above praying for the release of seized Maruti Wagon R VXI BS IV vehicle bearing Regn. No. TN63AT1076 and the cash of Rs.5,35,000/- under OR. No.109/2023 AIU, Trichy on 15.09.2023 from you.
2. In the voluntary statement given before the officers of AIU, Trichy on 15-09-2023 you have admitted that on the instructions of one Shri Naina, who was familiar to you, a plan was hatched to smuggle 999.000 grams of gold of 24 karat purity in the form of two Nos. of unfinished gold chains valued at Rs. 59,64,030/- without payment of duty. In the above statement you have admitted that Rs.5,35,000/- was kept in the vehicle to defray expenses in connection with the above smuggling activities. You have admitted that the said gold articles were brought from Singapore through the passenger Shri Natarajan and the Customs Driver Shri Kumar. You have admitted the keeping of the cash for the purpose of meeting out the expenses of paying commission to S/Shri Natarajan and Kumar for abetting the above smuggling activity.
3. Shri Natarajan has admitted in his voluntary statement given before the AIU officers on 15-09-2023 that he had brought two gold chains weighing 999.000 grams from Singapore by Indigo flight No.6E 1008 on 15-09-2023 to be handed over to Shri Kumar, Driver of Customs before DFMD for a commission of Rs 40,000/- as per the plan hatched by you.
4. Shri Kumar, Driver of Customs has admitted in his voluntary statement given before the AIU officers on 15-09-2023 the receipt of two Nos. of gold chains from Shri Natarajan for subsequently handing over to you for a commission of Rs.30000/- as per the plan hatched by you and also identified you as the receiver of the said gold chains from him.
5. From the statements of S/Shri Natarajan and Kumar, the seizure of the above said gold and the cash of Rs.5,35,000/- prima facie establishes the attempt hatched by you through S/Shri Natarajan and Kumar in smuggling above said gold and the amount of Rs.5,35,000/- kept in the vehicle for defraying the expenses in connection with the smuggling activities. You have used the Maruti Wagon R VXI BS IV vehicle bearing Regn. No. TN63AT1076 for the above smuggling activity which is evidenced by the recovery of Rs.5,35,000/- from the said vehicle and you have admitted the same in your voluntary statement.
6. In view of the above facts and circumstances, the above said gold, vehicle and the cash were seized by the officers of AIU. Further investigation is going on for unearthing the role of Shri Naina and the attraction other provisions such as Money Laundering Act. Since complete investigation of the above case has not completed, your request for release of the seized Maruti Wagon R VXI BS IV, vehicle bearing Regn. No. TN63AT1076 and the cash of Rs.5,35,000/- is rejected.
4. The learned Senior Standing Counsel for the respondents would submit that there is no scope for releasing the subject vehicle, as the subject vehicle is liable for confiscation in view of the admissions made by all the three persons viz., passenger-Natarajan, Customs Driver-Kumar and the petitioner, who was too received the smuggled gold and the cash, which were found in the petitioner’s vehicle.
5. It is submitted that the investigation will be completed in due course of time and appropriate orders will be passed for confiscation of the cash and the vehicle and therefore, the petitioner’s request for releasing the vehicle and the cash is liable to be rejected.
6. I have considered the arguments advanced by the learned counsel for the petitioner and Senior Standing Counsel for the respondents.
7. In my view, the presence of the car, that has been seized from the petitioner will serve no purpose for investigation, as the details are available with the Customs Department. Since no useful purpose will be served by keeping the vehicle idle without it being run. Its value will depreciate as the days go by. Therefore, to balance interest of the parties, the Court is inclined to come to the rescue of the petitioner by ordering provisional release of the subject car subject to the petitioner depositing a sum of Rs.1,00,000/- with the second respondent, as a security, for the proposed proceedings to be initiated against the petitioner for confiscation under the provisions of the Customs Act, 1962 and Prevention of Money Laundering Act, 2002.
8. The petitioner shall not transfer or alienate the subject car without permission of the Customs Department and the authorities under the provisions of the Prevention of Money Laundering Act, 2002. The petitioner shall produce the car for inspection once in six months pending further orders in the proceedings to be initiated against the petitioner and for confiscation of the car and the cash under the provisions of the Prevention of Money Laundering Act, 2002. Subject to such compliance, the car shall be released provisionally forthwith.
This Writ Petition is disposed of, with above directions. No costs.
