They lost the legal argument and won the bail: Gujarat High Court holds the BNSS notice does not govern a customs arrest, then asks why custody is needed

Eight hundred and eighty-two gold bars were seized from a Paldi flat. Justice Sanjeev J. Thaker holds Section 35(3) of the BNSS would add a condition to Section 104 of the Customs Act rather than supplement it — and still grants pre-arrest bail.

A father and son who absconded to Dubai through Nepal after the Directorate of Revenue Intelligence seized gold and watches worth over Rs 109 crore from an Ahmedabad flat have been granted anticipatory bail by the Gujarat High Court — after losing every legal argument they made. Justice Sanjeev J. Thaker held that the notice of appearance under Section 35(3) of the Bharatiya Nagarik Suraksha Sanhita, 2023 does not apply to an arrest by an empowered customs officer under Section 104 of the Customs Act, 1962, because applying it would add a condition to a special power rather than supplement it. The relief followed from something narrower: when the Court asked why custody was required, no specific answer was forthcoming.

What was found in Flat No. 104

Acting on specific intelligence that smuggled gold bars and jewellery were concealed at Flat No. 104, Avishkar Apartments, Mahalakshmi Society, Paldi, officers of the DRI's Ahmedabad Zonal Unit and the Gujarat Anti-Terrorism Squad searched the premises on 17 and 18 March 2025 under a search authorisation issued the previous day. Panchnamas were drawn on both dates.

The seizure memo of 28 March 2025 records 882 gold bars of 999.0 purity weighing 88,020 grams, with a market value of Rs 79,83,41,400 against a tariff value of Rs 72,72,19,480. Added to that were 19,794.08 grams of gold jewellery valued at Rs 12,88,32,991, ten watches valued at Rs 15,19,76,108, two watch belts, one mobile phone and Rs 1,37,98,000 in Indian currency. The total seizure value was put at Rs 109,33,83,948.

Of the 882 bars, 522 were of international make: 189 by Argor-Heraeus, 119 by Valcambi, 101 by MMTC-PAMP, 57 by SAM, 43 by UBS, 10 by Rand Refinery and 3 by The Perth Mint. Counsel for the applicants pointed out that it was not alleged that the identification marks on the bars were tampered with, false or fabricated.

The flat had been taken on rent by the son about four to five months before the search. The State's case was that there was no valid rent agreement.

Summons under Section 108 of the Customs Act were issued to both men on five dates each in March and April 2025, served by email and physically at their declared addresses. Neither appeared and neither produced the documents called for. The DRI filed complaints under Sections 208 and 210 of the BNSS before the Additional Chief Judicial Magistrate, Ahmedabad. From the day after the search, both left India for Dubai through Nepal, and Look Out Circulars were issued.

A Coordinate Bench had earlier held, on 14 May 2026, that Section 35(3) was not mandatory and that the investigating authority had rightly declined to issue notice given the applicants' conduct. In the resulting Special Leave Petition the Supreme Court protected them from arrest on 22 May 2026 subject to cooperation, and on 14 August 2026 disposed of the petition with a direction to decide these applications within four weeks, keeping all issues open and continuing the interim protection.

Where the Section 35(3) notice actually sits

The applicants' case was that the offence under Section 135 of the Customs Act is punishable with imprisonment up to seven years, that notice under Section 35(3) was therefore mandatory, and that no such notice had been issued. They relied on Arnesh Kumar v. State of Bihar and on Satender Kumar Antil v. Central Bureau of Investigation, and argued that a summons under Section 108 of the Customs Act, which is only for attendance to give evidence and produce documents, cannot stand in for the notice.

The judgment begins by reading Section 35 as a single scheme rather than a list of options. Under Section 35(1)(b), an officer may arrest without warrant for a cognizable offence punishable with up to seven years only if he has reason to believe on the basis of the complaint, information or suspicion that the person committed it, and is satisfied that arrest is necessary for one of the purposes in clauses (a) to (e) — recording his reasons in writing, and recording reasons even for not arresting.

Sub-section (3) then provides that where arrest “is not required under sub-section (1)”, the officer shall issue a notice of appearance. The Court's conclusion follows from that sequence: the notice is not an independent requirement. It comes into play only after the officer has examined the case under Section 35(1) and found that arrest is not required. The notice is the other side of the decision taken under Section 35(1).

Why Section 104 is built differently

Sections 4(2) and 5 of the BNSS carry the general architecture. Offences under other laws are investigated and tried under the BNSS, but subject to any enactment regulating the manner or place of investigation; and Section 5 saves any special or local law, any special jurisdiction or power conferred, and any special form of procedure prescribed by another law, unless there is a specific provision to the contrary. The judgment anchors this in the maxim generalia specialibus non derogant.

The Supreme Court in Radhika Agarwal v. Union of India had already held that the framework of the Customs Act reflects a legislative intent to establish a distinct and unique procedure for the exercise of arrest powers, noting that Section 104(4) specifies only four categories of offences as cognizable and that all others are non-cognizable.

Against that, Justice Thaker set out three features of Section 104 that distinguish it from Section 35. The power is given not to every customs officer but only to one empowered by general or special order of the Principal Commissioner or Commissioner of Customs. It is available only for offences punishable under Sections 132, 133, 135, 135A and 136. And it does not classify offences by the term of imprisonment at all — it classifies them by the nature of the goods and the amount involved, with sub-sections (4) and (5) deciding what is cognizable and sub-sections (6) and (7) what is non-bailable.

The single condition in Section 104(1) is that the empowered officer must have reason to believe that the person has committed such an offence. Radhika Agarwal held that this is a higher threshold than Section 41 of the Code of Criminal Procedure, 1973, which permits arrest on a reasonable complaint, credible information or reasonable suspicion. A person has reason to believe a thing if he has sufficient cause to believe it, which is more stringent than mere suspicion.

The two statutes also differ in how they secure attendance without arrest. Section 35 provides a notice of appearance; the Customs Act provides summons under Section 108 to any person whose attendance the officer considers necessary, and non-compliance can be prosecuted — which is precisely what the DRI did here.

On that reading the Court held that Section 35(3) does not merely complement Section 104. If applied, it would add a condition to the power of arrest conferred by Section 104(1). Because the Customs Act makes a specific provision on arrest, and that provision is saved by Sections 4(2) and 5 of the BNSS, the requirement of notice under Section 35(3) does not apply to an arrest by an empowered customs officer under Section 104. The arrest remains subject to the safeguards laid down in Radhika Agarwal. The judgment notes the same conclusion reached by the Bombay High Court at Goa in a case where a Chief Judicial Magistrate had granted bail partly because no Section 35(3) notice was served.

Two subsidiary arguments were rejected. Section 104(3), which gives a customs officer the powers of an officer in charge of a police station, does so only “for the purpose of releasing such person on bail or otherwise” — that is, after arrest; it does not import the provisions governing the decision to arrest. And Arnesh Kumar, whose directions were addressed to police officers and Magistrates under Sections 41 and 41A, reads the notice provision as applying where arrest is not required under Section 41(1); it does not lay down that notice must precede arrest even where the conditions of Section 41(1)(b) are satisfied.

The applicants' supporting authorities fell away with the main holding. A Gauhati High Court decision in Mukesh Agarwal v. Union of India, where summons had been issued under Section 70 of the CGST Act — a provision the applicants said was pari materia with Section 108 — had granted bail partly because no separate notice was issued; the Court distinguished it on the facts, noting that the applicant there had duly responded to the summons and that the arresting authority had recorded no reasons at all. A Karnataka decision had held that a summons under Section 70 of the CGST Act cannot be equated with a notice of appearance, which the judgment treats as consistent with its own reading rather than against it. And the principle in Parvinder Singh v. Directorate of Enforcement, that the BNSS applies absent a specific contrary provision in the special Act, was accepted as the same principle explained in Radhika Agarwal — and then applied, because Sections 4(2) and 5 save a special power, and the power of arrest under Section 104 is one.

And even if it had applied

Because much of the argument had turned on Satender Kumar Antil, the Court went on to ask whether the applicants would be better off assuming Section 35 did apply, and found the controversy academic.

Satender Kumar Antil holds that for an offence punishable with imprisonment up to seven years the notice under Section 35(3) is the rule and arrest the exception, while making clear that arrest is permissible where the conditions of Section 35(1)(b) exist — the mandate of Section 35(1)(b)(i) together with any one of the conditions in Section 35(1)(b)(ii).

Those conditions were satisfied here. The applicants did not comply with the Section 108 summons, absconded to Dubai through Nepal, and during the investigation one of them admitted that he destroyed the SIM cards and the mobile phone on reaching Dubai about ten days after the search. The notice, the Court held, cannot be read as an absolute and non-derogable condition, and an application for anticipatory bail cannot be decided on the lone ground that no notice was issued.

The judgment also records the narrow compass of judicial review of an arrest under a special Act. Following Radhika Agarwal, the Court's function is confined to seeing whether the officer was authorised under the Act, whether the reason to believe was based on material in his possession, and whether the arrestee was informed of the grounds. The sufficiency or adequacy of that material is not a matter for review at so nascent a stage of the inquiry.

The question that decided the case

Having closed every door on the law, the Court turned to the facts as they stood on the date of hearing.

After the Supreme Court granted protection, the first applicant appeared before the authority on 6 July 2026 and, on a further summons, again on 10 July 2026. The son returned from Dubai on 5 June 2026 and appeared on 9 June and 11 June 2026, after which he was told he would be called again if required. By letters of 16 August 2026 both men asked the DRI whether any further information or clarification was needed, and specifically whether a fresh date could be fixed so that no allegation of non-cooperation could be made. There was no reply.

When the Court specifically asked counsel for the respondent why custody of the applicants was required, no satisfactory or specific answer was forthcoming. Nothing was shown to indicate that after joining the investigation they had avoided it or withheld any document sought.

The reasoning turns on a distinction between power and necessity. Section 104 does empower an authorised customs officer to arrest when its conditions are met, but the existence of the power does not mean it must be exercised in every case; the need for arrest has to be considered on the facts of each case. No purpose was shown that could not be achieved without taking the applicants into custody.

Order

Both applications were allowed. In the event of arrest or appearance in connection with the DRI's case, the applicants are to be released on a personal bond of Rs 10,000 each with one surety of the like amount each.

They must cooperate with the investigation and make themselves available for interrogation whenever required; must not make any inducement, threat or promise to anyone acquainted with the facts; must not obstruct or hamper the investigation or tamper with evidence collected or yet to be collected; and were directed to remain present before the concerned authority on 7 October 2026 between 11 a.m. and 2 p.m. They must furnish their addresses at the time of executing the bond, not change residence until final disposal, not leave India without the Court's permission, and deposit their passports before the trial court within a week.

The investigating agency was given liberty to move the trial court for a direction under Section 483(2) of the BNSS to arrest the applicants on violation of any condition, including absconding, non-cooperation, evasion or intimidation of witnesses. The trial court was directed not to be influenced by the prima facie observations made while considering bail, and the order was expressly stated not to limit the agency's right to investigate the charges. Rule was made absolute to that extent.