INDRU RAMCHAND BHARVANI Vs. UNION OF INDIA

JUDGEMENT

(1.) M/s. Gems Impex Corporation, Bombay-Petitioner No. 3 is a firm carrying on business in diamonds and precious stones etc. Ramchand Udhavdas Bharvani-Petitioner No. 2 was a partner of the said firm. Indru Ramchand Bharvani, Petitioner No. 1 is his son. Both father and son were managing the business of the firm. The Customs Officers received a secret information that smuggled diamonds have been kept by Indru Ramchand Bharvani and Ramchand Udhavdas Bharvani in their business premises (M/s. Gems Impex Corporation). After obtaining necessary search warrant the Customs Officer searched the premises of the firm on 16 November 1979. They faund over 2800 carats of rough diamonds and over 400 carats of cut and polished diamonds in addition to number of other items of precious stones, pearls, gold manufactures etc., in the business premises of the firm. However, the books of account of the firm, though claimed to be written upto date, showed a stock of 11.96 carats of cut and polished diamonds and the stock of rough diamonds and other articles was shown as nil. When the Officers asked S/Shri Indru Ramchand Bharvani and Ramchand Udhavdas Bharvani to produce evidence of legal acquisition, import and possession of diamonds they showed their inability to produce any documents. They stated that they had purchased the goods locally through brokers and that they had already made 50 per cent of the payment in cash. The Cash Book, however, showed no such payment entries nor were any purchase vouchers produced before the officers. When asked to name the brokers so that the explanation of purchase given by them could be verified, the Petitioners No. 1 and 2 stated that the brokers would not come forward to confirm the deal. The Customs Officers also found various documents which have been described in the initial Panchnama as to various incriminating documents". Considering the totality of the circumstances in the background of the secret information the officer had received, the Customs Officer incharge of the search party formed the reasonable belief under section 110 read with Section 123 of the Customs Act 1962 (the Act) that the unaccounted diamonds etc were smuggled goods. The Customs Officer seized various goods including cut and polished diamonds and rough diamonds in all valued at Rs. 54,42,882.02 under Section 110 of the Act in the reasonable belief that the goods had been smuggled into India. The Customs Officer also seized Indian currency of Rs. 1.40 laksh. Certain incriminating documents found in the premises were also seized. In this petition we are only concerned with cut and polished diamonds and rough diamonds.

(2.) On 16th November 1979 a warning bad been issued by the Weather Office, Bombay, about a possible sea storm that night. The entire activities including the offices markets had been closed and public had been advised to rush back to their house early. In view of these circumstances only an initial panchnama was drawn on 16th November 1979. The goods and the documents seized were put in two cartons in the presence of the Panchas and the cartons were sealed with the Customs' seal and also with the seal provided by Petitioners No. 1 and 2 of M/s. Gems Impex Corporation and the signatures of the Panchas were also put on the label of the cartons. A detailed itemwise inventory of the seized goods and documents was prepared in the Customs House later on 20th, 21st and 22nd November 1979. Petitioners No. 1 and 2 were also asked by the department to attend preparation of the detailed itemwise inventories but they did not attend. Petitioner No. 1 even sent a letter saying that the work of preparing detailed inventories could go in his absence. It is not necessary to give further details about the Panchnamas prepared on 20th, 21st and 22nd November 1979 as no grievance has been made on that account by the learned counsel for the petitioners.

(3.) During the course of investigation, besides others, the statements of the petitioners 1 and 2 were also recorded towards the end of November 1979 under Section 108 of the Act. In his statement recorded on 29th November 1979 Ramchand Udhavdas Bharvani gave names of the following four dealers: 1. M/s. H.Kritikumar and Co. 2. M/s. Asohka Gems, 3. M/s. Naeva Exports, 4. M/s. Bikash Deep Enterprises.