Point of Law : High Court has grossly erred in quashing the criminal proceedings by entering into the merits of the allegations as if the High Court was exercising the appellate jurisdiction and/or conducting the trial. [Para 12]

ORDER :

The petitioners are before this Court calling in question registration of crime in Crime No.172 of 2019 on 16-07-2019 for offences punishable under Sections 66C and 72A of the Information Technology Act, 2000 and Sections 406, 420 and 34 of the IPC and pending before the 1st Additional Chief Metropolitan Magistrate, Bangalore City.

2. Heard Sri P.Prasanna Kumar, learned counsel appearing for the petitioners, Sri K.S.Abhijith, learned High Court Government Pleader for respondent No.1 and Sri M.N.Kumar, learned Central Government Standing Counsel appearing for respondent No.2.

3. Brief facts leading to the filing of the present petition, as borne out from the records, are as follows:-

1st petitioner -M/s ib Track Solutions Private Limited (‘Company’ for short), a Company registered under the Companies Act, 1956 is associated with procuring and supplying of e-seals with Radio Frequency Identification (‘RFID’) technology for exporters from India. The 2nd petitioner is the Director of the 1st petitioner/Company. The 1st petitioner/Company claims to have procured unique technology which was the first of its kind for the purpose of exporting cargo with tamperproof seals. The said seals were made to maintain highest level of safety and security. The seals were manufactured by M/s Leghorn Group SRL, Italy and the Company is the authorized distributor of the said seals and the seals are claimed to have been certified by the International Standard Organization (ISO) as high-grade e-seal for containers and M/s Leghorn Group is said to be the pioneer in the field of manufacture and supply of e-seals across the world. RFID is an automatic identification mechanism which is attached to a container and can be accurately read by a handheld device that is operated by a Customs Officer at the relevant port gate.

4. The Union Government intended to implement electronic sealing of cargo by exporters under a self-sealing procedure and in pursuance of the same by circulars called upon various vendors for supply of such seals. The said circulars sought for supply of RFID tamperproof onetime bolt seal. The circulars called upon vendors to supply e-seals with the technology support such as mobile or web-applications in order to reduce use of paper. The Company participated in the vendor approval process and custom officials were responsible with regard to verification of details of shipping and integrity of e-seals. The Company claims to have empanelled as an authorized vendor after detailed scrutiny and due diligence.

5. In terms of the procedure so stipulated in the Circulars, an exporter who intends to ship goods has to mandatorily place the goods sought to be exported into the container and lock the said container with e-seals provided by the authorized vendor. Upon locking with e-seal, the exporter must feed shipping details into the website of the authorized vendor Company. Once the vehicle with the containers along with e-seals reaches the port gate, the Custom Officer must physically check the serial number of the RFID e-seal and cross-verify with other details. If the serial numbers match, the Customs Officer must read the e-seal to examine whether the same has been tampered with, through the application of the vendor on the handheld device. This is the broad procedure for the container to pass through the port gate after checking with e-seals.

6. The Company claims to have been following all the procedure laid down in the Circulars. The Neptune e-seal which is distributed by the Company was proved to be unbreakable without physically breaking the stem of the said seal. It was alleged that on certain occasions the seals though not tampered appeared to be tampered and corrective measures were immediately taken. On 23-10-2018 the Directorate General of Analytics and Risk Management, Central Board of Indirect Taxes and Customs issued a letter directing the Company not to sell RFID e-seals manufactured by M/s Leghorn Group, Italy until further or