- (1.) Being aggrieved by an investigation now being conducted under Chapter XIV of the Code of Criminal Procedure (hereinafter referred to as the Code) by the Delhi Special Police Establishment of the Central Bureau of Investigation, New Delhi and a seizure made in course of such investigation between June 15, 1967 and June 18, 1967 at the Mill premises of the petitioner company at 42. Garden Reach Road, 24-Parganas, the petitioner moved this Court with a writ petition and obtained the above Rule.
(2.) The facts relevant to the present dispute are as follows: Petitioner, Kesoram Industries & Cotton Mills Limited was incorporated under the Indian Companies Act 1913 and is an existing Company within the meaning of Companies Act 1956. It has its registered office at 15, India Exchange Place and mill at 42, Garden Reach Road, P.S. Garden Reach, District 24-Parganas near Calcutta. On June 9, 1967 V.S. Naik, Assistant Collector (Appraising Division) Directorate of Revenue Intelligence, New Delhi lodged the following information with the Delhi Police Establishment at New Delhi.
(3.) Secret report dated 9.6.1967 of Shri V. S. Naik, Assistant Collector (Appg. Division), Directorate of Revenue Intelligence, New Delhi forwarded to Shri G. Koruthu, Director of Revenue Intelligence, New Delhi to the Central Bureau of Investigation under his D.O. No.1000/36/67 dated 9.6.67 to Shri D. Sen, I.P.S., Special I.G. of Police Central Bureau of Investigation, New Delhi and received in this office today reads as follows: - "The Directorate of Revenue Intelligence has been receiving information that serious fraud has been practiced during 1963-67 by the Managements of the following Birla Group of Textile Mills, namely: - 1. Mill of the Technological Institute of Textiles, Bhiwani Haryana. 2. M/s. Bhiwani Textile Mills, Bhiwani. 3. M/s. Birla Cotton Mills Ltd., Delhi 4. M/s. New Swadeshi Mills of Ahmedabad Ltd., Ahmedabad. 5. M/s. Manjushri Textiles, Ahmedabad. 6. M/s. Centrury Spinning & Manufacturing Co. Ltd., Bombay 7. M/s. Jiyajirao Mills, Gwalior, and 8. M/s. Keshoram Cotton & Industries Ltd., Calcutta and proper payment of Excuse Duties has been evaded, and wrongful gain obtained by the party by adopting one more of the following methods: (a) By making dishonest misrepresentation of facts in the matter of submission of statements and returns and giving 'trade names' to clear cloth manufactured in the mills on payment of no duty or less duty than actually recoverable from the mills by the Government; (b) By contravening the previous of Cotton Textile (Control) Order and notifications issued by the Textile Commissioner under the said Order as well as the ESSENTIAL COMMODITIES ACT, 1955 and thereby causing heavy pecuniary loss to the Government in the shape of non-payment of proper excise duties. (c) By the management of the local units in agreement with certain textile officers and excise officials causing to be misdeclared dishonesty or fraudulently clothe manufactured in the mill and thereby causing loss of revenue to the Central Government. (d) That certain Excise Officials posted in the various units were obtaining pecuniary advantage for themselves and for the management at the cost of Government revenue by adopting corrupt, or illegal means, or by otherwise abusing their position as public servants: As the informations were piling up, a preliminary check in one unit of the mills, that is M/s. Technological Institute of Textiles, Bhiwani, Harayana, was made and it has come to notice that by giving false declaration either with or without connivance of textile and Excise Officers, the Mill had been able to clear cloth of different variety by paying normal duty when the amount of duty chargeable was much more, and huge loss has been caused to the Central Revenues. A few instances are given below: - (1) The mill has manufactured and cleared Shirting Cloth with trade name 'Ladies Choice' which actually contains 53 reads and 50 picks as against 60 reeds and 44 picks declared. Since the incidence of duty on controlled categories of cloth (for which the reed pick difference should a minimum of 16) is less than the duty on the decontrolled categories, by this mis-declaration, the Mill was able to clear the cloth as a controlled variety, thereby evading duty to a considerable extent. (ii) The Mill has also manufactured and cleared Sarees of 3 to 4 meters lengths in contravention of the Textile Commissioner's Notification which prescribed a minimum length of 4.15 meters. Such short length of Sarees have also been misdeclared as Controlled variety and excise duty has thereby been evaded to a considerable extent. (iii) The Mill has also manufactured and cleared Prints with specifications 22-28 counts 52-42 reed picks misdeclaration them as 22-28 counts 56-40 or 60-44 reed picks so as to make them eligible for clearance as controlled duty to a considerable extent. 3. As the information appears reliable and is found corroborated from the enquiry made and the extent of fraud being indulged by the various units is expected to be very huge, it is suggested that the Central Bureau of Investigation may be moved to take up these cases for regular investigation. Open enquiries into other units have not been made by this office as there is likelihood of the persons concerned becoming aware of the enquiry and destroying the material evidence.";