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Gold Smuggling Not "Terrorist Activity" Under UAPA Though It Threatens Economic Security Of Nation : Kerala High Court

Hannah M Varghese
3 Nov 2021 3:44 AM GMT
Gold Smuggling Not Terrorist Activity Under UAPA Though It Threatens Economic Security Of Nation : Kerala High Court
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The Kerala High Court on Tuesday ruled that, while gold smuggling could threaten the economic security of a country, the same is not covered by the provisions of the Unlawful Activities (Prevention) Act. A Division Bench of Justice K Vinod Chandran and Justice C Jayachandran made the observation while granting bail to prime accused Swapna Suresh and seven others in the gold...

The Kerala High Court on Tuesday ruled that, while gold smuggling could threaten the economic security of a country, the same is not covered by the provisions of the Unlawful Activities (Prevention) Act. 

A Division Bench of Justice K Vinod Chandran and Justice C Jayachandran made the observation while granting bail to prime accused Swapna Suresh and seven others in the gold smuggling case that had shaken the State in 2020.

The judgment set off on a lighter vein as follows:

"The appellants lament; as the lyrics in a folk song in the vernacular intones, 'we are petty smugglers unduly labelled as terrorists', resulting in their continued incarceration pending investigation and trial, infringing their right to life guaranteed under Article 21 of the Constitution." 

Precedent:

Coming to the merits of the appeals preferred before it, the Bench observed that while smuggling of gold could very well be a threat to the nation's economic security, it was not contemplated to be hit by UAPA.

To arrive at this conclusion, the Court first relied on the decision of Muhammed Shafi P. v. NIA Kochiwhere it was held that smuggling of gold is covered by the provisions of the Customs Act and will not fall within the definition of a 'terrorist act' as defined under Section 15 of UAPA.

It was also held that unless evidence shows that such smuggling was done with the intent to threaten the economic security or monetary stability of India, by attempting to indulge in any manner in the counterfeiting of high-quality notes or coins, then and then alone, Sec.15 would be attracted. 

"The Judges (in Muhammed Shafi P) relied on the principles of 'ejusdem generis" and 'noscitur a sociis', to hold that the arrangement of words in the provision would not include gold smuggling with a mere motive for illegal profiteering; which cannot, by any means, be defined to be a 'terrorist act'. Nor was it the intention of the legislature when 'economic security' was incorporated," the Court observed.

The Court observed that since the decision of the Division Bench had not yet been stayed by the Supreme Court, it was bound by the same.

The cited case was decided in February 2021, where a Division Bench had released 12 accused persons in the case on bail on the said observations. However, eight were denied bail upon being identified as 'front-runners' in the case.

Intent of Parliament

Similarly, the Court also noted that the legislative intent behind UAPA was not to include within its ambit any activity of merely smuggling with the motive of profit and evasion of duty. 

To justify this, reliance was placed on the explanation of the Ministry of Home Affairs before the Department Related Parliamentary Standing Committee on Home Affairs. 

It was evident therefrom that the attempt of the Parliament was only to curb State-sponsored counterfeiting, from across the borders of the nation. 

"In fact in our humble view, even smuggling of gold and other precious metals which aims at destabilizing the economy would be covered under threats to economic security, as generally understood. But this element was not contemplated by the Parliament as is evident from the debates on the bill, which the members of the Treasury Bench supported on the specific ground of state/sovereign sponsored counterfeiting from across the borders," the judgment reads.

Further, the legislature has the power to bring in any act threatening the 'economic security' as a terrorist act, but the insertions by amendments confined it to counterfeiting of high-quality currency.

Elaborating on the point, the Court said that if the intention of the parliament was to widen the definition of terrorism to bring in acts such as gold smuggling which could destabilise the economy, it had the opportunity to do so.

However, the amendment restricted the definition of terrorist activity destabilising the economy to counterfeiting of high-quality currency or coins.

"True; acts of destabilization of the economy, as distinguished from a physically violent subversive act could also be deemed to be a subversive act against the nation. If the intention was to widen the definition of terrorism, to bring in acts, destabilizing the economy; surely the Parliament had the power. But, the Parliament by inserting economic security in Sec. 15(1) and simultaneous insertion of sub-clause (iiia) of clause (a) by the very same amending act, restricted the definition of terrorist activity, in so far as destabilizing the economy, to counterfeiting of high-quality currency or coins," the Court said.

Therefore, it held that gold smuggling simpliciter does not come under the ambit of UAPA.

"We are of the opinion that counterfeiting; that too of high-quality currency notes or coins and any material so to do is the only species included under section 15(1)(a)(iiia)."

Moreover, expanding the current definition would only undermine the intention of the parliament, the Court said.

"According to us, in the guise of a purposive interpretation, the intent to threaten or the likelihood of threatening economic security in Section 15(1), if given a more expansive meaning, then it would be undermining the very intention of the Parliament which is explicit in sub-clause (iiia) of clause (a)," the judgment stated.

"If we do that then we would violate the dictum in Mathai Varghese and would be recasting, redesigning and rewriting the provision thus embarking upon a legislative exercise; which power this Court and every Court lacks."

Going by the parliamentary debates and reading Section 15(1) and the various acts enumerated in the body of the provision with the clauses incorporated, the Court found no reason to differ from the decision in Muhammed Shafi P.

On these grounds, the bail applications were allowed.

What Was The Gold Smuggling Case of 2020?

Briefly put, the accused had allegedly smuggled gold through the diplomatic channel availing the intimate connection Swapna Suresh and Sarith P.S had with the Consulate of United Arab Emirates at Thiruvananthapuram; wherein the duo were formerly employed.

A piece of particular baggage was detained by the Customs Officials when 30.422 kgs. of gold worth Rs.14.82 crores were seized from it. The investigation revealed repeated consignments of contraband having been brought into the country, camouflaged as diplomatic baggage.  

On March 22, 2021, a Special Court for offences under the NIA Act had rejected the bail plea moved by the accused leading to the present appeal before the High Court.

Case Title: Swapna Prabha Suresh v. Union of India

Click Here To Read/Download The Judgment

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