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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,  Vijay Nagpal and Chetan Mehta moved the Sessions Judge,

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

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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  preceding period of ten years and that Court has taken

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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  persons indulging in hoarding and black-marketing of and

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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  Parliament by the 1981 Act would have  the effect of   altering     

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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.   Mr. Nariman submitted that the said approval reveals

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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. Referring  to the list of cases on the basis whereof

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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  approval had been granted to apply the provisions of MCOCA

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

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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  strict observance of the said provisions.  There can be no

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

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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  before this Court and the same was once again dismissed on

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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.