Ker HC | Gold Smuggling is not a terrorist activity, it does not qualify as ‘any other material’ under S. 15(1)(a)(iiia) of Unlawful Activities Prevention Act; HC grants bail

Kerala High Court: In an interesting case the Division Bench comprising of A. Hariprasad and M. R. Anitha, JJ., had granted bail to the accused of terrorist activities. All the accused were booked for gold smuggling with an intention to destabilize the economy of the nation under the Unlawful Activities Prevention Act, 1967 (UAPA).

The instant appeal was filed against the order of Trial Court, whereby the Court had granted bail to all the accused except the accuse 7. National Investigation Agency (NIA) had registered the above-mentioned case alleging offences punishable under Ss. 16, 17 and 18 of UAPA. Accused persons were arrested by NIA on different dates and they had been confined to custody for a considerable time.

Allegations raised by the investigating agency was that on 05-07-2020, the officers of the Customs Department seized 30kgs of 24 carat gold, from International Airport, Thiruvananthapuram, secreted in a consignment camouflaged as diplomatic baggage sent from United Arab Emirates (UAE). It was alleged that the gold was smuggled through the diplomatic channel pursuant to a conspiracy hatched by the accused persons. It had been argued that the smuggled gold could have been used for financing terrorist activities in India or to destabilizing the economic security of India.

Interpretation of “Terrorist Activities”

The Bench interpreted the scope of Section 15 of UA(P) Act. Section 15(1) had mentioned that “whoever does any act with intent to threaten or likely to threaten the unity, integrity, security, economic security or sovereignty of India through any of the modes specified in Clauses (a), (b) or (c) commits a terrorist act.”

Similarly, under Sub-clause (iiia) to Section 15(1)(a) it had been established that “by any means of whatever nature if any damage to the monetary stability of India is caused or likely to be caused by way of production or smuggling or circulation of high quality counterfeit Indian paper currency, coin or of any other material, then also it will amount to a terrorist act.”

The Court discerned from Section 15(1)(a)(iiia) that what become a terrorist act thereunder was causing damage to the monetary stability of India by producing high quality counterfeit Indian paper currency, coin or any other material or smuggling of high quality counterfeit Indian paper currency, coin or any other material or circulating high quality counterfeit Indian paper currency, coin or any other material.

Whether “Any other material” under Section 15(1)(a)(iiia) would include gold smuggling?

It was contended by the appellant that high-quality counterfeit Indian paper currency or coin could not be disassociated or separated from the words “any other material”. The Bench while applying statutory rules of interpretation stated that it would be apposite to consider the wafer-thin distinction between “noscitur a sociis” and “ejusdem generic”. High-quality counterfeit Indian paper currency, coin or any other material should be read and understood as anything directly related to currency or coin.

Further, the Bench expressed, the legislature must had been aware of the existence of the Customs Act when it amended Section 15. Non-inclusion of the Customs Act in the Schedule to NIA Act also must be regarded as a conscious act by the legislature. Therefore, the Court said that by applying the above-mentioned rules of interpretation that smuggling of gold simplicitor would fall within Section 15(1)(a) (iiia) of UA(P) Act. The Bench said,

Gold smuggling clearly covered by the provisions of the Customs Act would not fall within the definition of Terrorist Act in Section 15 unless evidence was brought out to show that it was done with the intent to threaten or it was likely to threaten the economic security or monetary stability of India.

  “Other material” could be any material connected to counterfeit Indian paper currency or counterfeit Indian coin, like machinery or implements or high-quality paper or any other material which could be used for producing or circulating fake currency or coin. Noticing the arrangement of words indicating the things mentioned in the provision, the Court refused to accept gold smuggling with a mere illegal profit motive would fall within the aforementioned definition of the Terrorist Act. The Bench stated,

“It does not include gold as the words employed in the Sub-clause specifically mention about production or smuggling or circulation of high quality counterfeit Indian paper currency or coin and therefore gold cannot be grouped along with paper currency or coin even though gold is a valuable substance and has a great potential to get converted into cash.”

 Differentiating the judgment of Rajasthan High Court in Mohammed Aslam v. Union of India, 2021 SCC OnLine Raj 117, wherein it was held that smuggling of gold with intent to threaten or likely to threaten the economic security of the country was covered under the smuggling of “any other material”, the Bench said, it could be made out from the decision that no analysis of the provision was made by the Single Judge. Moreover, no specific reason had been stated for making the aforementioned observations.

Hence, the Bench affirmed the view hold by the Trial Judge that the materials produced before the court at that point of time were insufficient to hold prima facie that the accused persons had committed a terrorist act. Therefore, it had been held that there was no reason to think that the accused to whom bail had been granted will flee from justice or meddle with the investigation. Consequently, the appeal was dismissed and the bail order was affirmed.[Muhammed Shafi P., v. National Investigation Agency, 2021 SCC OnLine Ker 902, decided on 18-02-2021]


Kamini Sharma, Editorial Assistant has put this story together

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