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CASE NO.:

Special Leave Petition (crl.) 3320-21 of 2005

PETITIONER:

State of Maharashtra & Ors

RESPONDENT:

Lalit Somdatta Nagpal & Anr

DATE OF JUDGMENT: 13/02/2007

BENCH:

Dr. AR. Lakshmanan & Altamas Kabir

JUDGMENT:

J U D G M E N T

WITH

Special Leave Petition (Crl.) No. 1101 of 2006

Special Leave Petition (Crl.) No. 4581 of 2006

and

Special Leave Petition (Crl.) No. 4611 of 2006

ALTAMAS KABIR,J.

Five Special Leave Petitions, of which three have been

filed by the State of Maharashtra, one by Lalit Somdatta

Nagpal and one by Kapil Nagpal, have been taken up for

hearing together as they involve common questions of law

relating to the application of the provisions of the Maharashtra

Control of Organized Crime Act, 1999 in respect of offences

alleged to have been committed under Sections 3 and 7 of the

Essential Commodities Act, 1955. In order to answer the

above question, it is necessary to briefly set out the facts

involved in these Special Leave Petitions.

On 6th June, 2004 the Deputy Commissioner of Police

(Enforcement), Crime Branch, Mumbai alongwith other

officers, including the District Supply Officer, Kolhapur, Nayab

Tehsildar, Taluka Karveer, Distt. Kolhapur, raided Vijayanand

Petrol Pump, Kolhapur and seized two iron tanks of 12,000

and 6,000 litres capacity, greenish lubricating oil in 200 litres

barrel, 45 kilos of white chemical powder in 5 gunny bags and

ten motor tankers containing petroleum products and two

empty tankers, worth Rs.77,14,195/-, and arrested 9 persons

in connection therewith.

On the statement made by Ranjit Pandurang Desai,

Nayab Tehsildar, Karveer Taluka, a case was registered at

Karveer Police Station, Kolhapur, being C.R. No. 39/2004,

under Sections 3 and 7 of the Essential Commodities Act,

1955 and under Section 3 of the Petroleum Storage and

Distribution Act, 2000 against 11 accused persons. Out of the

11 accused persons 10 were arrested and produced before the

Chief Judicial Magistrate, Kolhapur, and remanded to judicial

custody on 7th May, 2004. On 20th May 2004, on the orders

of the Director General of Police, the investigation into the

alleged offence was transferred to CB (Control), Crime Branch,

Worli, Mumbai.

On an application made by the prosecution for police

custody of the accused persons, the Fast Track Court,

Kolhapur, by its order dated 25th May, 2004 remanded the

accused persons to police custody from judicial custody. On

27th May, 2004, Lalit Nagpal, Ranjana Nagpal, Anil Nagpal,

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Vijay Nagpal and Chetan Mehta moved the Sessions Judge,

Kolhapur, for grant of anticipatory bail and although initially

protection was given from arrest, on 14th June, 2004 the

Sessions Judge rejected the anticipatory bail applications of all

the applicants except that of Ranjana Nagpal, the wife of the

accused Lalit Nagpal. The second anticipatory bail application

filed by Anil Nagpal, Chetan Mehta and Lalit Nagpal by way of

three separate Writ Petitions were rejected by the High Court.

The Writ Petition filed by Vijay Nagpal was allowed while the

others were directed to surrender before the Police on or before

20th August 2004.

The said Anil Nagpal, Lalit Nagpal and Chetan Mehta

thus filed Special Leave Petitions against the order of the

Bombay High Court and renewed their prayer for anticipatory

bail before this Court. This Court also initially directed that

the applicants be not arrested and directed them to attend the

Police Station every day. Subsequently, however, on 14th

December, 2004 the Special Leave Petitions were dismissed

and the petitioners therein were directed to surrender and

apply for regular bail before the Trial Court.

Thereafter, on 19th January, 2005, Lalit Somdatta Nagpal

filed Criminal Writ Petition No. 44 of 2005 in the High Court

challenging the approval order dated 31st October 2004 passed

under Section 23(1)(a) of the Maharashtra Control of

Organized Crime Act, 1999 (hereinafter referred to as

"MCOCA")

Accused Chetan Mehta also filed a writ petition, being

No. 276 of 2004, in the Bombay High Court also challenging

the approval order dated 31st October, 2004 under Section

23(1)(a) of the above Act.

The said two writ petitions were heard by the High Court

along with Writ Petition No. 2562 of 2004 filed by the accused,

Deepak Dwarkadas Mundado, on 2nd February, 2005. On the

said date the writ petition of Deepak Mundada was permitted

to be withdrawn and the remaining two writ petitions were

adjourned till 10th February, 2005 and again till 17th February,

2005, when one of the other accused, Anil Nagpal, filed Writ

Petition No. 146 of 2005.

By judgment dated 11th March, 2005, Bombay High

Court allowed the writ petitions filed by Lalit Nagpal and Anil

Nagpal upon holding that having regard to the provisions of

the Essential Commodities Act, 1955 and the Essential

Commodities (Special Provisions) Act, 1981, the provisions of

MCOCA would have no application to the cases against the

petitioners. The State of Maharashtra has filed S.L.P.(Crl.)

Nos.3320-21 of 2005 against the said judgment of the Bombay

High Court.

Though, for reasons which are different from those given

while allowing the writ petitions filed by Lalit Nagpal and Anil

Nagpal, the Bombay Court in a separate judgment issued

rule and granted interim relief in Criminal Writ Petition No.

2183 of 2005 filed by Lalit Nagpal & Ors. seeking to quash CR

II-B of 2005 registered with Rasayani P.S., Raigad, and also for

quashing the investigation proceedings under MCOCA. The

State has filed SLP(Crl) No. 1101 of 2006 against the interim

order passed by the Bombay High Court in Criminal Writ

Petition No. 2183 of 2005.

Special Leave Petition (Criminal) 4581 of 2006 has been

filed by Lalit Nagpal against the order of the Bombay High

Court dated 14th July, 2006 whereby Lalit Nagpal's prayer for

bail in Crl. Application No.1057 of 2006 was rejected, but the

second application, being Crl. Application No. 348 of 2006, for

shifting the applicant to a particular hospital, was directed to

be placed before the appropriate Court taking up such

applications.

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The fifth and last Special Leave Petition (Crl.) No. 4611 of

2006 has been filed by Kapil Lalit Nagpal against the order

dated 1st September 2006 passed by the Bombay High Court

in his Criminal Writ Petition No. 2183 of 2005 directing him to

surrender before the Reviewing Authority at Kolhapur within

two weeks, failing which his petition, interalia, for restraining

the respondents from arresting him and stay of further

investigation in Rasayani P.S., Raigad, C.R. No. II-B/2005,

would stand dismissed..

As the common question of law in all these Special Leave

Petitions relate to the applicability of MCOCA to the offences

alleged to have been committed by Lalit Nagpal and Kapil

Nagpal, we have heard the matters together and are disposing

of all the five petitions by this common judgment.

Appearing for the State of Maharashtra in these Special

Leave Petitions, Mr. Uday Lalit took us through the relevant

provisions of the Maharashtra Control of Organized Crime Act,

1999, in support of his stand that the High Court had

erroneously held that the provisions of the said Act would

have no application in respect of the offences alleged to have

been committed by Lalit Nagpal and others in connection with

CR 39 of 2004 under Sections 3 and 7 of the Essential

Commodities Act, 1955 and Section 3 of the Petroleum Storage

and Distribution Act, 2000 and in respect of CR No. II-B of

2005 of Rasayani P.S., Raigad.

Mr. Lalit drew our attention to the expression "continuing

unlawful activity" defined in Section 2(i)(d) of the MCOCA,

which reads as follows:-

2(1)(d) " continuing unlawful activity " means

an activity prohibited by law for the time being

in force, which is a cognizable offence

punishable with imprisonment of three years

or more, undertaken either singly or jointly, as

a member of an organized crime syndicate or

on behalf of such syndicate in respect of which

more than one charge-sheets have been filed

before a competent Court within the preceding

period of ten years and that Court has taken

cognizance of such offence;

He also drew our attention to the definition of "organized

crime" and "organized crime syndicate" which is defined in

Section 2(1)(e) and (f) of the above Act as under :-

2(1)(e) "organized crime" means any continuing

unlawful activity by an individual, singly or

jointly, either as a member of an organized

crime syndicate or on behalf of such syndicate,

by use of violence or threat of violence or

intimidation or coercion, or other unlawful

means, with the objective of gaining pecuniary

benefits, or gaining undue economic or other

advantage for himself or any other person or

promoting insurgency ;

2(1)(f) "organized crime syndicate" means a

group of two or more persons who, acting

either singly or collectively, as a syndicate or

gang indulge in activities of organized crime ;

Mr. Lalit pointed out that the expression "continuing

unlawful activity" implied activity prohibited by law for the

time being in force, which is a cognizable offence punishable

with imprisonment of three years or more, continuously

undertaken and in respect whereof more than one charge

sheets have been filed before a competent Court within the

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preceding period of ten years and that Court has taken

cognizance of such offence.

Mr. Lalit then took us through Section 3 of the MCOCA

which provides punishment for organized crime. The portion

of Section 3 which is relevant for our purpose is Sub-section

(1) which is set out hereinbelow:-

3(1)(i) if such offence has resulted in the death

of any person, be punishable with death or

imprisonment for life and shall also be liable to

a fine, subject to a minimum fine of rupees one

lac ;

(i) in any other case, be punishable with

imprisonment for a term which shall not

be less than five years but which may

extend to imprisonment for life and

shall also be liable to a fine, subject to

minimum fine of rupees five lacs ;

Mr. Lalit also referred to Section 21 of the aforesaid Act

which provides for the modified application of certain

provisions of the Code of Criminal Procedure in respect of

offences under MCOCA. He laid special emphasis on Sub-

sections (3) and (4) whereby the provisions of Section 438 of

the Code have been made inapplicable to cases under MCOCA

and grant of bail has been made dependent on certain

conditions. He lastly referred to Section 23(1)(a) which

provides that no investigation could be taken up without the

prior approval of the Police Officer not below the rank of

Deputy Inspector General of Police.

Since according to Mr. Lalit offences under the Essential

Commodities Act also attracted the provisions of MCOCA, he

also referred to some of the relevant provisions of the Essential

Commodities Act, 1955. He firstly referred to Section 3 which

empowers the Central Government to control production,

supply, distribution etc. of essential commodities and in

particular provides for powers to the Central Government to

make Orders to provide for the purposes set out in Sub-

section(2).

He pointed out that by virtue of Section 7 of the Act any

person contravening any order made under Section 3 would be

punishable

(i) in the case of an order made with

reference to clause (h) or clause (i) or

sub-section (2) of that section, with

imprisonment for a term which may

extend to one year and shall also be

liable to fine, and

(ii) in the case of any other order, with

imprisonment for a term which shall not

be less than three months but which

may extend to seven years and shall

also be liable to fine :

[Provided that the court may, for any

adequate and special reasons to be

mentioned in the judgment, impose a

sentence of imprisonment for a term of

less than three months;]

Mr. Lalit submitted that under Section 10A of the above

Act every offence punishable under the Essential Commodities

Act would be cognizable.

Mr. Lalit urged that in order to more effectively deal with

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persons indulging in hoarding and black-marketing of and

profiteering in essential commodities, the Central Government

enacted the Essential Commodities (Special Provisions) Act,

1981, which came into force on 1st September, 1982, in all the

States and Union Territories, except in the Union Territories of

the Andaman and Nicobar Islands, Arunachal Pradesh, Dadra

and Nagar Haveli, Lakshadeep and Mizoram. Mr. Lalit

submitted that by virtue of Section 1(3) and as indicated in the

preamble to the Act, the same was to be valid for a period of

15 years from the date of commencement of the Act except in

respect of things done or omitted to be done before such

cesser of operation of the Act and Section 6 of the General

Clauses Act 1897 would apply upon such cesser of operation

of the Act. In other words, the Act which came into force on

1st September,1982 was to remain in force till 31st August,

1997.

Mr. Lalit contended that by virtue of the provisions of

the 1981 Act, Section 7 of the principal Act was amended to

make the said provision more stringent by removing the

prohibition to impose a sentence of less than three months.

Mr. Lalit submitted that Section 12A of the principal Act

had been substituted by Section 12A of the 1981 Act which

provides for the constitution of special Courts and provides

further in Section 12AA that all offences under the Act would

be triable only by the Special Court constituted for the area in

which the offence had been committed or where there are

more special courts than one for such area by such one of

them as may be specified in this behalf by the High Court. He

pointed out that 12AA(f) provides that all offences under the

1981 Act was to be tried in a summary way and the provisions

of Section 262 to 265 of the Code of Criminal Procedure

would, as far as may be, apply to such trial.

Assailing the judgment of the High Court wherein it had

been held that since trials under the Essential Commodities

Act were to be tried by Special Court in a summary way for

which the maximum sentence that could be imposed was two

years, the provisions of MCOCA had no application. Mr. Lalit

submitted that such a view was not sustainable.

Mr. Lalit submitted that notwithstanding the

amendments which have been introduced by the 1981 Act to

Section 7 of the principal Act, the main provisions of Section 7

of the principal Act remained untouched. He submitted that

the punishment provided for under Section 7(1)(a)(ii) of the

1955 Act remain unchanged and punishment for an offence to

which the said provision was attracted would continue to be

punishable with imprisonment for a term which would not be

less than three months but could extend to 7 years with

liability to pay fine as well.

Mr. Lalit submitted that having regard to the above, the

provisions of MCOCA would still be applicable to cases to be

tried by the Special Court under the provisions of the

Essential Commodities (Special Provisions) Act, 1981.

In support of his submissions, Mr .Lalit firstly referred to

and relied on a decision of this Court in the case of Nirmal

Kanti Roy vs. State of West Bengal, reported in (1998) 4 SCC

590, where almost the same question, as has been indicated

by Mr. Lalit, had come up for consideration in the context of

Section 468 of the Code of Criminal Procedure. In the said

matter, the contention which had been raised on behalf of

the appellant was that although Section 7 (1) (a) (ii) of the

1955 Act provided for maximum imprisonment of seven

years, by virtue of the provisions of Section 12 AA (1) (f) of the

1981 Act, the maximum punishment which could be

imposed for an offence under the said Act is only two years.

On such reasoning, it was contended that the limit fixed by

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Parliament by the 1981 Act would have the effect of altering

the extent of punishment for the offence under Section 7 of

the 1955 Act to imprisonment for a period of two years.

The aforesaid contention was turned down by this Court

upon holding that when the maximum punishment prescribed

under Section 7 (1) (a) (ii) was seven years, merely because

the proviso to Section 12 AA (1) (f) limits the jurisdiction of

the Special Court to award sentence up to two years, it would

not make the offence itself punishable with only two years'

imprisonment. It was observed that one has to look at the

punishing provision to know the extent of the sentence

prescribed and not at the limit fixed for a particular court in

the matter of awarding sentence.

Reference was also made to the decision of this Court in

the case of State of West Bengal vs. Falguni Dutta And

Anr., (1993) 3 SCC 288, where also a similar view was taken.

As far as S.L.P. (Crl.) No.1101/06 is concerned, Mr. Lalit

submitted that the prayer of the writ petitioners to quash

C.R.No.II-B registered with Rasayani Police Station, Raigarh

and for quashing the investigation under MCOCA is yet to be

considered, but having held in the earlier case that MCOCA

would not apply to an offence under the Essential

Commodities Act, the same benefit had been extended to the

writ petitioners in the present case and at the interim stage

relief had been granted in terms of prayer 'C' to the writ

petitioner which reads as follows:-

"To restrain the respondents from applying,

carrying on further investigation and from

arresting the petitioners under the provisions

of MCOC Act pertaining to the FIR registered

with Rasayani Police Station at C.R.No.II-

B/2005 on the complaint of Shri S.S.

Tathaude, P.I. attached to LCB, Alibag,

pending the hearing and final disposal of

this petition."

Mr. Lalit submitted that by virtue of the said interim

order, the investigating agencies have been prevented from

the proceeding further with the investigation and/or arresting

the petitioners under the provisions of the MCOCA. Mr. Lalit

submitted that the decision in the first two matters would

have a direct bearing on the decision to be rendered in this

Special Leave Petition as well.

Mr.R.F. Nariman, appearing for the respondents in the

first two Special Leave Petitions also referred to the provisions

of Section 2 (d) of MCOCA and laid special emphasis on the

expression "continuing". He urged that "continuing

unlawful activity" would necessarily mean continuous

engagement in unlawful activity where there would be a live

link between all the different offences alleged. According to

Mr. Nariman, isolated incidents spread over a period of 10

years, involving different types of offences, would not attract

the provisions of MCOCA. Such activity must be such as to

have a link from the first to the last offence alleged to have

been undertaken in an organized manner by an organized

crime syndicate. It was contended that there was nothing on

record to indicate the existence of any organized crime

syndicate for the purpose of carrying on any continuing

unlawful activity as envisaged under Section 2 (d) (e) and (f) of

MCOCA.

Reference was also made to the approval granted by the

Special Inspector General of Police, Kolhapur Range, granting

permission under Section 23 (1) (a) of MCOCA for applying

Section 3 (1) (2) (4) of MCOCA to Karveer Police Station

C.R.No.39 of 2004 under Sections 3 and 7 of the 1955 Act.

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Mr. Nariman submitted that the said approval reveals

complete non-application of mind inasmuch as except for

Karveer Police Station C.R.No.39/04, no other case alleged to

be pending against the respondents had even been referred to

in the said order so as to make out a case of "continuing

unlawful activity" which by its very connotation contemplates

more than one offence spread over a period of 10 years. Apart

from the above, it was also submitted that reference had been

made under the order of approval to Section 3 of the

Petroleum Storage and Distribution Act which enactment does

not exist.

It was submitted that it is obvious that the sanctioning

authority had not applied its mind in granting approval

under Section 23 (1) (a) of MCOCA and mechanically granted

such permission. Mr. Nariman submitted that the approval

granted to apply Section 3 (1) (2) (4) of MCOCA to the

respondents was liable to be set aside on such score alone.

Mr. Nariman then drew our attention to the changed

legal position in view of the enactment of the Essential

Commodities (Special Provisions) Act, 1981. He urged that the

effect of Section 7 of the principal Act and in particular Sub-

section (1) (a) (2) thereof stood altered by virtue of Section 12

AA (1) (f) of the 1981 Act. Mr. Nariman urged that by virtue of

Section 12 A of the 1981 Act, provision was made for the

constitution of Special Courts as Section 12 AA provided that

notwithstanding anything contained in the Code of Criminal

Procedure all offences under the Act would be triable only by

the Special Court constituted for the area and that all such

offences were to be tried in a summary way and that the

provisions of Sections 262 to 265 of the Code may be

applicable as far as may be to such trial. Mr. Nariman

submitted that the proviso to Section 12 AA (1) (f) made it

even more clear that in the case of any conviction in a

summary trial under the said Section, it would be lawful for

the Special Court to pass the sentence of imprisonment for a

term not exceeding two years. It was urged that by virtue of

the above the provisions of MCOCA stood eliminated in

respect of proceedings involving an offence under the

Essential Commodities (Special Provisions) Act, 1981. It was

submitted that in order to attract the provisions of MCOCA the

cognizable offence had to be punishable with imprisonment of

three years or more, which is not so in respect of offences

under the 1981 Act where the punishment has been limited to

two years only.

Mr. Nariman submitted that the decision rendered in

Falguni Datta's case (supra) was in the context of Section 167

(5) of the Code of Criminal Procedure relating to the

completion of investigation within the stipulated period and

has little relevance in the instant case. Mr. Nariman

submitted that the provisions of MCOCA were extremely

stringent and application of the provision thereof would have

far reaching consequences including restrictions on grant of

bail. In fact, by virtue of Section 21 (3), the provisions of

Section 438 of the Code of Criminal Procedure have been

made inapplicable in relation to any case involving the arrest

of any person accused of having committed an offence

punishable under the MCOCA. Section 21 (4) also lays down

that no person accused of an offence punishable under the

Act shall, if in custody, be released on bail, on his own bond

unless the conditions indicated are fulfilled. Mr. Nariman

submitted that in view of the stringent provisions of MCOCA,

its provisions were required to be strictly interpreted as was

observed by this Court in Ranjitsing Brahmjeetsing

Sharma vs. State of Maharashtra And Anr., (2005) 5 SCC

294, commonly known as Telgi case.

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Referring to the list of cases on the basis whereof

sanction had been granted, Mr. Nariman submitted that the

cases related mainly to offences under the Indian Penal Code

which would immediately reveal that there was no live link

between the old and new cases to constitute continuing

unlawful activity. He also added that "organized crime" as

defined in Section 2 (e) of MCOCA contemplated continuing

unlawful activity by use of violence or threat of violence or

intimidation or coercion or other unlawful means with the

objective of gaining pecuniary benefits or gaining undue

economic or other advantage for the perpetrator of the crime

or any other person promoting insurgency. He urged that

none of the said ingredients were present in respect of the

cases for which sanction had been granted to apply the

provisions of MCOCA to the case of the respondents.

It was urged that the High Court had rightly held that the

provisions of MCOCA would not apply to the cases filed

against the respondents and no interference was called for

therewith.

Mr. Harish Salve, learned senior counsel, who appeared

for the respondents in S.L.P. (Crl.) 1101/2006, while re-

emphasizing the submissions made by Mr. Nariman regarding

the interpretation of the expression "continuing unlawful

activity" in relation to Sections 3 and 7 of the MCOCA urged

on a different note that the entire proceedings taken under

MCOCA against the respondents were misconceived. He

reiterated that having regard to the stringent provisions of

MCOCA, the said provisions would have to be strictly

interpreted.

Mr. Salve urged that an offence under the MCOCA being

one of 'continuing unlawful activity', there could not be more

than one First Information Report in respect of the same set

of offences, as has been done in the instant case. Mr. Salve

submitted that such a course of action was contrary to the

provisions of MCOCA and consequently the approval given to

apply the provisions of MCOCA to the respondents was not

only untenable but in complete violation of Section 23 (1) (a) of

MCOCA. Mr. Salve, submitted that as will appear from the

application made by the P.I.L. C.B., Raigad, on 18th August,

2005, for permission to register an offence under Section 1 (ii)

of MCOCA against the respondents, there is only one case

involving Kapil Lalit Nagpal and that too essentially under the

provisions of the Indian Penal Code. With malicious intent

another case has been referred to which had, however, been

dismissed. Similarly, a case has been mentioned in relation to

both Lalit Nagpal and Anil Nagpal under Sections 120B, 364,

302, 506 (2), Indian Penal Code and Section 34, Arms Act,

from which they had already been acquitted.

Mr. Salve also urged that in the absence of any

enactment, such as the Petroleum Storage and Distribution

Act, on the basis whereof sanction had purportedly been given

to apply the provisions of MCOCA to the petitioners, such

sanction was wholly invalid as it is clear that the same was

granted mechanically without application of mind despite the

drastic consequences involved.

Mr. Salve urged that not only had no ground been made

out for interference with the order of the High Court, but

observations are required to be made by this Court regarding

the manner and the circumstances in which the provisions of

Acts having drastic consequences such as MCOCA should be

applied.

Mr. Mukul Rohtagi, learned senior counsel, who

appeared for some of the other respondents, adopted the

submissions made by Mr. Nariman and Mr. Salve. He

submitted that the alleged offences, on the basis of which

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approval had been granted to apply the provisions of MCOCA

to the petitioners' cases, did not satisfy the conditions relating

to commission of and/or involvement in continuing unlawful

activity which forms the very basis of an offence under

MCOCA.

He also submitted that approval having been given on the

basis of a non-existent enactment, such approval stood

vitiated on such account.

Replying to the submissions made on behalf of the

respondents in the first three petitions, who were also the

petitioners in the fourth and fifth petitions, Mr. Lalit

submitted that the conflict in ratio in Falguni Datta's case

(supra) and in Durgesh Chandra Shah vs. Vimal Chandra

Shah, 1996(1) SCC 341, had been referred to a larger Bench to

resolve the question relating to the interpretation of Section

167(5) of the Code of Criminal Procedure as amended by the

State of West Bengal. The controversy stood concluded upon

the larger Bench holding that as the offence under Section

7A(1)(9)(ii) of the Essential Commodities Act is punishable with

imprisonment upto seven years, the offence would not attract

the bar of limitation under Section 468 of the Code.

Mr. Lalit submitted that the said decision reversed the

decision in Falguni Datta's case in relation to the

interpretation of Section 7 in respect of offences under

MCOCA.

Mr. Lalit disputed Mr. Nariman's submissions that a live

link had to exist been the different cases on the basis of which

the decision is taken to apply the provisions of MCOCA.

According to Mr. Lalit, the legislature has consciously not

referred to such nexus theory so that each individual offence

could be treated as a separate cause to apply MCOCA. It was

also submitted that 'organized crime' as defined in Section

2(1)(e) of MCOCA does not indicate that such organized crime

is required to be accompanied by any of the coercive methods

mentioned therein and any unlawful means would be

sufficient to attract the said definition.

As to the filing of two FIRs necessitating the grant of two

approvals it was submitted that after the First FIR had been

lodged and approval obtained in respect thereof, a further

offence came to light as part of the sequence of continuing

unlawful activity. This compelled the authorities to lodge a

second FIR and seek approval in respect thereof also. It was

sought to be urged that two FIRs were really the result of

continuing unlawful activity, which is the very basis for an

offence under MCOCA.

On the question of grant of bail to Lalit Nagpal, Mr. Lalit

contended that the said petitioner in SLP (Crl) No. 4581 of

2006 had absconded for a considerable length of time and

that, in any event, by virtue of the interim orders passed in the

Special Leave Petition, he had been allowed to be treated in a

private hospital in Bombay of his choice, though under the

custody of the investigating authorities.

Mr. Lalit submitted that the said order of 15th December,

2006 was still being given effect to and the petitioner could

continue to avail of such treatment, when necessary, since his

application for bail on medical grounds was still pending

before the High Court.

Regarding the challenged thrown by Kapil Nagpal to the

order dated 1st September, 2006 passed by the High Court

directing him to surrender before the Investigating Authority

within two weeks failing which his petition for quashing the

FIR registered with Rasayani Police Station would stand

dismissed, Mr. Lalit submitted that no ground had been made

out to interfere with the same.

He submitted that since Kapil Nagpal had also absconded

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and steps had been taken under Section 82 of the Code of

Civil Procedure against him, the High Court had quite rightly

directed him to surrender before his application for quashing

could be taken up for consideration.

From the submissions made on behalf of the State of

Maharashtra, it appears that the main question for

determination in the Special Leave Petitions filed by the State

of Maharashtra relates to the applicability of MCOCA to

offences under the Essential Commodities Act, 1955, having

particular regard to the enactment of the Essential

Commodities (Special Provisions) Act, 1981.

As noticed hereinbefore, the Essential Commodities

(Special Provisions) Act, 1981 came into force on 1st

September, 1982 and was to remain in force for a period of

15 years. Under Section 12 AA (1) (a) of the aforesaid Act, all

offences under the said Act were to be triable by Special

Courts. Section 12 AA (1) (f) further provides that all offences

under the Act are to be tried in a summary way and the

provisions of Sections 262 to 265 of the Code of Criminal

Procedure shall apply, as far as may be, to such trial. In case

of conviction, the proviso limits the period of punishment to

imprisonment for a term not exceeding two years.

Before the commencement of the 1981 Act, all offences

relating to the contravention of Orders made under Section 3

of the 1955 Act were triable by Judicial Magistrates of the

First Class or by Metropolitan Magistrates who had powers to

impose punishment of imprisonment for a term which could

even extend to 7 years by virtue of Section 7 (1)(a) (ii) of the

aforesaid Act. It is only after the commencement of the 1981

Act that all offences under the said Act were triable by a

Special Court with powers to impose punishment for a term

not exceeding two years.

Since the provisions of MCOCA can be applied in respect

of continuing unlawful activity which has been defined to

mean an activity prohibited by law for the time being in force

and which is a cognizable offence punishable with

imprisonment of 3 years or more, it has been urged by Mr.

Nariman that the provisions of the 1981 Act made provisions

of MCOCA inapplicable for offences under the said Act. Even

the High Court has proceeded on the aforesaid basis and has

inter \026 alia observed that the offences punishable under the

provisions of the 1955 Act, committed during the period when

the 1981 Act was in force, could not be said to be offences

which could be considered for the purpose of continuing

unlawful activity as defined in Section 2 (d) of the MCOCA.

The said view taken by the High Court in our judgment is

incorrect inasmuch as the offences under the 1955 Act

continued to attract the provisions of Section 7 thereof. The

only change brought about by the 1981 Act was to limit the

power of the Special Court to impose punishment for a

maximum period of two years. The offence continues to

remain punishable up to a maximum period of seven years so

as to attract the provisions of MCOCA.

The aforesaid position has been clearly explained in

Nirmal Kanti Roy's case (supra) wherein this Court held

that merely because the proviso to Section 12 AA (1) (f) limits

the jurisdiction of the Special Court to award sentence up to

two years it would not make the offence itself punishable

with only two years' imprisonment.

The submissions advanced on behalf of the respondents

on this count must, therefore, fail.

However, we are in agreement with the submission that

having regard to the stringent provisions of MCOCA, its

provisions will have to be very strictly interpreted and the

concerned authorities would have to be bound down to the

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strict observance of the said provisions. There can be no

doubt that the provisions of the MCOCA have been enacted to

deal with organized criminal activity in relation to offences

which are likely to create terror and to endanger and unsettle

the economy of the country for which stringent measures have

been adopted. The provisions of the MCOCA seek to deprive a

citizen of his right to freedom at the very initial stage of the

investigation, making it extremely difficult for him to obtain

bail. Other provisions relating to the admission of evidence

relating to the electronic media have also been provided for. In

such a situation it is to be seen whether the investigation from

its very inception has been conducted strictly in accordance

with the provisions of the Act.

As has been repeatedly emphasized on behalf of all the

parties, the offence under MCOCA must comprise continuing

unlawful activity relating to organized crime undertaken by

an individual singly or jointly, either as a member of the

organized crime syndicate or on behalf of such syndicate by

use of coercive or other unlawful means with the objective of

gaining pecuniary benefits or gaining undue economic or

other advantage for himself or for any other person or for

promoting insurgency. In the instant case, both Lalit

Somdutt Nagpal and Anil Somdutt Nagpal have been shown

to have been involved in several cases of a similar nature

which are pending trial or are under investigation. As far as

Kapil Nagpal is concerned, his involvement has been shown

only in respect of CR No.25/03 of Rasayani Police Station,

Raigad, under Sections 468,420,34, Indian Penal Code and

Sections 3, 7,9 & 10 of the Essential Commodities Act. In

our view, the facts as disclosed justified the application of the

provisions of the MCOCA to Lalit Nagpal and Anil Nagpal.

However, the said ingredients are not available as far as Kapil

Nagpal is concerned, since he has not been shown to be

involved in any continuing unlawful activity. Furthermore, in

the approval that was given by the Special Inspector General

of Police, Kolhapur Range, granting approval to the Deputy

Commissioner of Police (Enforcement), Crime Branch, C.I.D.,

Mumbai to commence investigation under Section 23 (1) of

MCOCA, Kapil Nagpal has not been mentioned. It is only at a

later stage with the registering of CR No.25/2003 of Rasayani

Police Station, Raigad, that Kapil Nagpal was roped in with

Lalit Nagpal and Somdutt Nagpal and permission was granted

to apply the provisions of the MCOCA to him as well by Order

dated 22nd August, 2005.

In addition to the above, a glance at the permission

sought by P.I.L.C.B., Raigad, on 18th August, 2005 seeking

permission for registering an offence under Section 1 (ii)

MCOCA 1999 against Lalit Nagpal, Anil Nagpal, Kapil Nagpal

and one Parasnath Ramdular Singh will reveal that such

permission was being sought for, as far as Kapil Nagpal is

concerned, in respect of an offence allegedly under Section 63

of the Sales Tax Act, which in our opinion would not attract

the provisions of the MCOCA.

We, therefore, have no hesitation in holding that as far as

Kapil Lalit Nagpal is concerned, the provisions of the MCOCA

have been misapplied to him.

Since we have already held that the limitation of the

power to impose punishment only for a maximum period of

two years for an offence under the 1981 Act did not preclude

the authorities from applying the provisions of the MCOCA for

offences under Sections 3 & 7 of the 1955 Act as well as the

1981 Act, we are left with the question as to whether the

same had been applied to the case of Lalit Nagpal and Anil

Nagpal strictly in accordance with the provisions of the

MCOCA 1999. Having regard to the stringent provisions of

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the MCOCA, Section 23 (1) (a) provides a safeguard to the

accused in that notwithstanding anything contained in the

Code of Criminal Procedure, no investigation of an alleged

offence of organized crime under the MCOCA, 1999 can be

commenced without the prior approval of a police officer not

below the rank of Deputy Inspector General of Police. An

additional protection has been given under Sub-section (2) of

Section 23 which prohibits any Special Court from taking

cognizance of any offence under the Act without the previous

sanction of a police officer not below the rank of Additional

Director General of Police.

In the instant case, though sanction had been given by

the Special Inspector General of Police, Kolhapur Range, on

31st August, 2004, granting permission under Section 23 (1)

(a) of the MCOCA 1999 to apply its provisions to the alleged

offences said to have been committed by Anil Nagpal, Lalit

Nagpal and Vijay Nagpal, such sanction reveals complete non-

application of mind as the same appears to have been given

upon consideration of an enactment which is non est. Even if

the subsequent approval order of 22nd August, 2005 is to be

taken into consideration, the organized crime referred to in the

said order is with regard to the alleged violation of Sales Tax

and Excise Laws, which, in our view, was not intended to be

the basis for application of the provisions of the MCOCA 1999.

To apply the provisions of MCOCA something more in the

nature of coercive acts and violence in required to be spelt out

so as to bring the unlawful activity complained of within the

definition of "organized crime" in Section 2 (a) of MCOCA .

In our view, both the sanctions which formed the very

basis of the investigation have been given mechanically and

are vitiated and cannot be sustained. In taking recourse to

the provisions of the MCOCA 1999, which has the effect of

curtailing the liberty of an individual and keeping him virtually

incarcerated, a great responsibility has been cast on the

authorities in ensuring that the provisions of the Act are

strictly adhered to and followed, which unfortunately does not

appear to have been done in the instant case.

We are not, therefore, inclined to interfere with the

decision of the High Court though for reasons which are

entirely different from those given by the High Court.

The Special Leave Petitions (Crl.) Nos. 3320-3321/2005

filed by the State of Maharashtra are, therefore, dismissed.

For the same reasons, Special Leave Petition (Crl.)

No.1101/2006 filed by the State of Maharashtra must also

fail and the High Court will now have to dispose of the

application filed by the petitioners in Crl.Writ Petition No.

2183/2005 for quashing C.R. No.II-8/2005 registered with

Rasayani Police Station, Raigad.

As far as Special Leave Petition (Crl.) No. 4581/2006 is

concerned, the same has been filed against the order passed

by the Bombay High Court rejecting the petitioner's prayer for

grant of bail. As will be seen from the records, the petitioner

had earlier applied for grant of anticipatory bail which was

rejected by the Bombay High Court. In the Special Leave

Petition filed against the said order of rejection, this Court

also on 14th December, 2004 rejected the petitioner's prayer

for grant of anticipatory bail. This Court however granted 15

days' time to the petitioner to surrender and to apply for

regular bail. Despite the said order, the petitioner did not

surrender till 1st July 2005, and thereafter applied for bail

which was rejected on the ground that the petitioner had

violated the order passed by this Court on 14th December,

2004 and had absconded for almost six months before

surrendering. The order passed by this Bombay High Court

rejecting the petitioner's prayer for bail was again challenged

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before this Court and the same was once again dismissed on

20th January, 2006 with the observation that such dismissal

would not bar the petitioner to approach the trial court

afresh. Thereafter, the petitioner moved a fresh application for

bail before the Sessions Court which was rejected on 3rd

March, 2006. The petitioner challenged the order of the

Sessions Court in the Bombay High Court which once again

dismissed the petitioner's prayer for grant of bail on the

ground that the circumstances had not changed except that

the prayer for enlarging the petitioner on had been made bail

on medical grounds. While rejecting the petitioner's prayer

for bail, the High Court observed that on the basis of the

medical report, no case had been made out for enlarging the

petitioner on bail. However, the prayer as regards shifting the

applicant to a particular hospital would have to be considered

on its own merits.

Special Leave Petition (Crl.) No. 4581/2006 is directed

against the said order of the High Court refusing to grant bail

to the petitioner.

It may be indicated that during the pendency of the

writ petition, this Court on a consideration of the medical

condition of the petitioner permitted him to be treated in a

private hospital, though under the custody of the respondents.

We understand that the petitioner continues to be

hospitalized. Having regard to the fact that we have dismissed

the Special Leave Petitions filed by the State of Maharashtra

against the order of the Bombay High Court holding that the

provisions of MCOCA had been misapplied to the facts of the

case, the stringent provisions regarding bail under the

MCOCA 1999 will no longer be attracted in this case. Since

the petitioner has been under arrest since the date of his

surrender on 1st July, 2005, and having further regard to his

medical condition, we direct that the petitioner, Lalit Somdutt

Nagpal, be released on bail to the satisfaction of the Chief

Judicial Magistrate, Kolhapur. He will surrender his passport

to the Chief Judicial Magistrate, Kolhapur, until further orders

of the magistrate and will not leave the country without the

prior permission of the magistrate and shall report to the

Investigating Officer of the different cases as and when called

upon to do so. Special Leave Petition (Crl.) No. 4581/2006 is

accordingly allowed and the order of the Bombay High Court

dated 14th July, 2006 refusing the petitioner's prayer for grant

of bail is set aside.

As far as Special Leave Petition (Crl.) No.4611/2006 is

concerned, since we have held hereinbefore while deciding the

Special Leave Petitions filed by the State of Maharashtra that

Kapil Lalit Nagpal had been wrongly proceeded against under

the provisions of the MCOCA 1999, we allow the special leave

petition and set aside the order passed by the Bombay High

Court on 1st September, 2006 in Crl. Writ Petition

No.2183/2005 with a direction to hear out the petitioner's

said writ petition in accordance with law.

There will be no order as to costs in any of these special

leave petitions.