State of Maharashtra Vs. Jayanti Lal
& Ors [1984] INSC 14 (17 January 1984)
MISRA RANGNATH MISRA RANGNATH FAZALALI, SYED
MURTAZA
CITATION: 1984 AIR 612 1984 SCR (2) 431 1984
SCC (1) 583 1984 SCALE (1)89
ACT:
Forward Contracts (Regulation) Act 1952 Section
22A and 22B as inserted by the Amending Act 62 of 1960,-Whether the two newly
inserted sections exclude the application of section 5(2) of Criminal Procedure
Code-Whether the presumptions provided under section 22B of the Act would be
available in respect of books of account and documents seized in investigations
under the Code where action has not been taken under section 22A.
HEADNOTE:
Dismissing the appeal by Special Leave, the
Court,
HELD: 1 By sections 22 A and 22B, inserted
into the Forward Contracts (Regulation) Act, 1952, by the Amending Act 62 of
1960, the application of the provisions of section 5(2) of the Criminal
Procedure Code in respect of offences under the Act was not excluded.
Therefore, even with these provisions in the Act, it was open to the
prosecution to make investigations under the Code and in exercise of the powers
vested under Section 165 thereof, search and seizure could be effected [436H,
437A]
2. Section 22A of the Forward Contract
(Regulation) Act is a Special pro vision prescribing a particular procedure.
Section 22B(1) does refer to documents seized
from any place as referred to in s. 22A(1). Ordinarily, in a criminal
prosecution the burden to prove the charge is on the prosecutor. A special rule
of evidence has been provided by raising a presumption as a result of which the
burden which ordinarily on the prosecution has been shifted to the defence.
[435C-E] The manner in which the two new provisions have come into the Act, the
placement of the two provisions, reference to books of account and document
seized from any place in s.
22B(1) which are words used in s. 22A (1),
and the fact that Parliament has prescribed a special procedure of
authorisation by a magistrate and has prescribed special credence to be given
to these documents seized pursuant to the particular procedure prescribed, lead
to the only conclusion that the benefit of s. 22B of the Act is confined to
books of account and documents which have been seized pursuant to a warrant
authorising a police officer not below the rank of sub-inspector as prescribed
in s. 22A(1) of the Act. A special mode was proscribed requiring magisterial
warrant; authorisation of a police officer not below the rank of a
sub-inspector, the place to be searched was required to be specified in
warrant; magisterial control was prescribed over the investigation and when
these conditions were satisfied, the special rule of evidence became
applicable. [435 E-G] Admittedly there is no indication in s. 22B of the Act as
to whether entries in 432 the books of account and documents seized without the
aid of s. 22A(1) would have the benefit of such presumption. But since a
special procedure has been indicated in s. 22A and s. 22B which is with
reference to s. 22A has provided the special mode of evidence, that in order to
have the benefit of s. 22B of the Act, the prosecution must have carried on the
search and seizure of the books of account and documents in the manner
prescribed under s. 22A(1) of the Act. Unless the special procedure has been
followed, the Special rule of evidenced under s. 22B of the Act would not be
attracted.
[435H, 436A-B]
3. Since it would be open to the prosecution
to carry on investigation of offences under the normal provisions of the Code
as also by invoking the Special provisions in s.
22A of the Act, to separate positions would
arise with reference to seized books of account and other documents.
When s. 22A of the Act has been invoked the
presumption under s. 22B of the Act would arise. When investigation has been
carried under the Code without the aid of s. 22A of the Act, the presumption
would not arise and the prosecution will have to prove the documents according
to the ordinary rule of evidence. There is nothing anomalous because in one
case the normal rule of evidence would apply and in the other, where the
special mode has been invoked, the presumptions would arise. Such a situation
is not unknown in law, [436 B,D,E] State of U.P. & Anr. v. Chambers of
Commerce (Regd.), Chandausi, District Moradabad &. Ors. (1970) All. LJ.
182;
M.R. Pillai v. M/s. Motilal Vrijbhukhandas
& Ors., AIR 1970 Bont 24 approved.
The Bullion & Agricultural Produce
Exchange Private Ltd v. The Forward Markets Commission, Bombay & Ors., AIR
1968 338 overruled.
CRIMINAL APPELLATE JURISDICTION : Criminal
Appeal No. 447 of 1979.
Appeal by Special leave from the Judgment and
Order dated the 1st/2nd February, 1979 of the Bombay High Court (Nagpur Bench)
in Criminal Appeal No. 26, 27-30, 33 and 36 of 1975 and Criminal Revision
Application Nos. 82 & 83 of 1975.
O.P. Rana and M.N. Shroff for the Appellant.
N.M. Ghatate and V.D. Deshpande for the
Respondents.
The Judgment of the Court was delivered by
RANGANATH MISRA, J. This appeal by special leave at the instance of the State
of Maharashtra is directed against the decision of a Full Bench of the High
Court of Bombay dealing with an interesting question under the Forward
Contracts (Regulation) Act, 1952 ('Act' for short). Several prosecutions were
launched against the respondents for offences punishable under sections 20 and
21 of the 433 Act on the basis of investigation carried under section 5(2) of
the Code of Criminal Procedure, 1898 ('Code' for short) and seizure of
documents as a result of search conducted under s. 165 of the Code. Two cases
ended in conviction and seven prosecutions resulted in acquittal. Against the
conviction two separate appeals were carried to the Court of Sessions which
were dismissed. The convicted accused carried two criminal revisions to the
High Court. Against acquittal in other prosecutions the State preferred appeals
to the High Court. The seven criminal appeals and the two criminal revisions
were ultimately referred to a Full Bench for deciding the question raised,
viz., as to whether or not the cases in question would be governed by the
provisions of s. 22B of the Act.
The Full Bench has come to the following
conclusions (State of Maharashtra v. Jayantilal Popatlal Chandrani, etc):
(1) By sections 22A and 22B inserted into the
Act by Amending Act 62 of 1960, the application of the provisions of s. 5(2) of
the Code in respect of offences under the Act was not excluded.
Therefore, even with these provisions in the
Act it was open to the prosecution to make investigation under the Code and in
exercise of powers vested under s. 165 thereof search and seizure could be
effected;
(2) The manner of search and seizure under
the Code and under s. 23A of the Act were different. The new provisions were
inserted into the Act with a view to obviating the difficulties in successfully
prosecuting the delinquents for offences under the Act;
(3) The presumption contemplated in s. 22B is
confined to books of account and other documents seized pursuant to a warrant
issued under s. 22A (1) of the Act and not to documents seized in exercise of
powers under the Code.
The High Court referred to an earlier
decision of the Division Bench of the same Court, where it had been held that
the insertion of the two provisions by Act 62 of 1960 did not have the effect
of excluding the application of the Code to prosecutions under the Act but in
view of the conclusions indicated above, it did not agree. with 434 the earlier
view of the Division Bench that the presumption under s. 22B of the Act also
extended to documents seized in investigation under the Code without the aid of
s 22A of the Act.
Neither counsel contended before us that the
insertion of ss. 22A and 22B had the effect of excluding the application of s.
5(2) of the Code. We are in agreement with the view expressed by the Full Bench
that the provisions of the Code still apply to investigation of offences under
the Act.
The only question which has been seriously
debated at the Bar is as to whether the presumptions provided under s. 22B of
the Act would be available in respect of books of account and documents seized
in investigations under the Code where action has not been taken under s. 22A
of the Act ? The two sections inserted by Act 62 of 1960 provided:
"22A. (1) Any presidency magistrate or a
magistrate of the first class may, by warrant, authorise any police officer not
below the rank of sub- inspector to enter upon and search any place where books
of account or other documents relating to forward contracts or options in goods
entered into in contravention of the, provisions of this Act, may be or may be
reasonably suspected, to be, and such police officer may seize any such book or
document, if in his opinion, it relates to any such forward contract or option
in goods;
(2) The provisions of the Code of Criminal
Procedure, 1898, shall, so far as may be, apply to any search or seizure made
under sub-section (1) as they apply to any search or seizure made under the
authority of a warrant issued under section 98 of the said Code.
22B. (1) Where any books of account or other documents
are seized from any place and there are entries therein making reference to
quantity, quotations, rates, months of delivery, receipt or payment of
differences or sale or purchase of goods or option in goods, such books of
account or other documents shall be admitted in evidence without witnesses
having to appear to prove the same; and such entries shall be prima facie
evidence of the matters, transactions and accounts purported to be therein
recorded;
435 (2) In any trial for an offence punishable
under section 21, it shall be presumed, until the contrary is proved, that the
place in which the books of account or other documents referred to in
sub-section (1) were seized, was used, and that the persons found therein were
present, for the purpose of committing the said offence." There is no
dispute that these provisions came to be inserted when it became difficult to
successfully prosecute offenders under the Act on account of want of evidence,
particularly with reference to the accounts and other documents. Both the
sections were introduced at the same time. Section 22A(1) empowers the
presidency magistrate or a magistrate or the first class, by warrant, to
authorise a police officer not below the rank of a sub-inspector to enter upon
and search any place where books of account or other documents relating to
forward contracts or options in goods entered into in contravention or the
provisions of the Act may be or may reasonably be suspected to be available.
This indeed is a special provision prescribing
a particular procedure. Section 22B(1) does refer to documents seized from any
place as referred to in s. 22A(1). Ordinarily, in a criminal prosecution the
burden to prove the charge is on the prosecutor. A special rule of evidence has
been provided by raising of a presumption as a result of which the burden which
ordinarily lay on the prosecution has been shifted to the defence. The manner
in which tho two now provisions have come into the Act, the placement of the
two provisions, reference to books of account and documents seized from any
place in s 22B(1) which are words used in s. 22A(1), and the fact that
Parliament has prescribed a special procedure of authorisation by a magistrate
and has prescribed special credence to be given to these documents seized
pursuant to the particular procedure prescribed, lead to the only conclusion
that the benefit of s. 22B of the Act is confined to books of account and
documents which have been seized pursuant to a warrant authorising a police
officer not below the rank of sub-inspector as prescribed in s. 22A(1) of the
Act. A special mode was prescribed requiring magisterial warrant, authorisation
of a police officer not below the rank of a sub-inspector, the place to be
searched was required to be specified in warrant; magisterial control was
prescribed over the investigation and when these conditions were satisfied, the
special rule of evidence became applicable.
Admittedly there is no indication in s. 22B
of the Act as to whether entries in the books of account and documents seized
without the aid 436 of s. 22A(1) would have the benefit of such presumption.
But since a special procedure has been indicated in s. 22A and s. 22B which is
with reference to s. 22A has provided the special mode of evidence, we agree with
the view of the Full Bench that in order to have the benefit of s. 22B of the
Act, the prosecution must have carried on the search and seizure of the books
or account and documents in the manner prescribed under s. 22A(1) of the Act.
Unless the special procedure has been followed, the special rule of evidence
under s. 22B of the Act would not be attracted.
As we have held that it would be open to the
prosecution to carry on investigation of offences under the normal provisions
of the Code as also by invoking the special provisions in s. 22A of the Act,
two separate positions would arise with reference to seized books of account
and other documents. When s. 22A of the Act has been invoked the presumption
under s. 22B of the Act would arise.
When investigation has been carried under the
Code without the aid of s. 22A of the Act, the presumption would not arise and
the prosecution will have to prove the documents according to the ordinary rule
of evidence. It was canvassed before us that such an anomalous position could
not have been intended by Parliament and it must have been the legislative
intention to extend the benefit of s. 22B to books of account and documents
seized by the prosecution with or without the aid of s. 22A of the Act. We are
not inclined to accept this submission for the reasons we have indicated and in
our opinion there is nothing anomalous because in one case the normal rule of
evidence would apply and in the other, where the special mode has been invoked,
the presumptions would arise. Such a situation is not unknown in law and we
uphold the view of the Full Bench.
At the hearing some decisions of the
different High Courts were placed before us. A learned single Judge in The
Bullion & Agricultural Produce Exchange Private Limited v. The Forward
Markets Commission, Bombay & Ors., took the view that search conducted
without the requisite warrant from a magistrate was an initio void. In view of
the conclusions we have reached, this decision is certainly bad and cannot be
accepted as laying down good law. In State of U.P. & Anr. v. Chambers of
Commerce (Regd.), Chandausi, District Moradabad & Ors., a Division Bench
had taken the view that under s. 5(2) of the Code offences under the Act could
still be investigated 437 and s. 165 of the Code was not inconsistent with but
supplemental to s. 22A of the Act. So far as this decision goes there is
nothing inconsistent with what we have said. A single Judge of the Bombay High
Court in M.R. Pillai. v. M/s. Motilal Vrijbhukandas & Ors., took the view
that s. 22A of the Act did not debar the police from exercising the powers
under s. 165 of the Code. This is in accord with the conclusion reached by us.
The appeal is dismissed and the decision of
the Full Bench is affirmed.
S.R. Appeal dismissed.
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