Dr. Partap Singh & ANR Vs.
Director of Enforcement Foreign Exchange Regulation & Ors [1985] INSC 105
(26 April 1985)
DESAI, D.A. DESAI, D.A.
ERADI, V. BALAKRISHNA (J)
CITATION: 1985 AIR 989 1985 SCR (3) 969 1985
SCC (3) 72 1985 SCALE (1)1208
ACT:
Foreign Exchange Regulation Act 1973 section
37 and Code of Criminal Procedure. section 165-Search warrant- Issuance
of-Officer whether obliged to record in writing the grounds for his belief
before issuance-'Reason to believe'- What is-Whether grounds inducing
'reasonable belief to be stated In search warrant-Whether open to judicial
scrutiny.
Foreign Exchange Regulation Act section 37 38
and 41- Search and Seizure-Illegality of-Whether would render seizure pursuant
to illegal search Invalid-Evidence collected during illegal search-Court to be
cautious in assessment.
Income Tax Act 1961 section 132 A-Warrant of
authorisation to seal documents articles seized during the search under section
37 of the Foreign Exchange Regulation Act 1973-Whether could be returned.
Words and phrases-(caning of-'Reason to
believe' and 'so far as may be-Meaning of-Section 37 (1) and Section 37 (2) of
FERA 1973.
HEADNOTE:
The appellants husband and wife moved the
High Court under Article 226 for quashing of a search warrant issued by
respondent No. 2-Assistant Director, Enforcement, as also the warrant of
authorisation issued by respondent No. 5- Commissioner of Income Tax and for a
direction to return articles seized during the search of their house and for
relief incidental and ancillary thereto. The appellants alleged that respondent
No. 6-an Assistant Com. missioner of Income Tax, bore personal malice towards
them, attributable to an incident concerning the servant of the appellants and
an application for transfer of appeals pending before him was made to the
Chairman Central Board of Direct Taxes by the first appellant. Actuated by this
persona; malice, respondent No. 6 first instigated respondent No. 2 to issue a
search warrant under the authority of which a raid was carried out at the
residence of the appellants which led to the seizure of certain documents
including some foreign currency. Thereafter when the appellants made various
representations for return of documents, again instigated by respondent No. 6,
970 respondent No. 5 issued a warrant of authorisation under section 132 A of
the Income Tax Act directing respondent No.
2 to deliver such books of accounts and other
documents and goods seized during the search to the requisitioning officer. The
documents and material seized during the search had not been returned.
The High Court held that there was nothing
illegal in the issuance of the search warrant, the consequent search, the
seizure during the search and taking over of the documents by the Income Tax
Department under Section 132-A and dismissed the petition.
In the appeal to this Court it was contended
by the first appellant: (i) that respondent No. 2 acted in a manner contrary to
law in issuing a search warrant without any material before him on which he
could entertain a reasonable belief that any documents which in his opinion
will be useful for, or relevant to, in investigation or proceedings under
Foreign Exchange Regulation Act, 1973 are secreted in any place and (ii) that
as the second respondent did not record his reasons in writing on which
reasonable belief was entertained, the search warrant issued by him was
illegal.
Dismissing the appeal, ^
HELD 1. When an officer of the Enforcement
Department proposes to act under section 37 he must have reason to believe that
the documents useful for investigation or proceeding under the Act are
secreted. The material on which the belief is grounded may be secret, maybe
obtained through intelligence or occasionally may be conveyed orally by
informants. It is not obligatory upon the officer to disclose his material on
the mere allegation that there was no material before him on which his reason
to believe can be grounded. Whether these grounds are adequate or not is not a
matter for the Court to investigate. [079F-H: 977A-C] S. Narayanappa v.
Commissioner of Income Tax, Bangalore, [1967] 1 SCR 590 relied upon.
2. The expression 'reason to believe' is not
Synonymous with subjective satisfaction of the Officer. The belief must be held
in good faith; it cannot be merely be a pretence. It is open to the Court to
examine the question to the limited extent whether the reasons for the belief
have a rational connection or a relevant bearing to the formation of the belief
and are not extraneous or irrelevant to tho purpose of the section. [977 D-E]
3. Sub-Section (2) of section 37 provides a
shield against abuse of power inasmuch as that where an officer below the rank
of the Director of Enforcement carried out the search, he must send a report to
the Director of Enforcement. [978C-G] 971 In the instant case, the reply
affidavit on behalf of the respondents I to 4 and the original papers, shown to
the Court, indicate that there was material before the second respondent which
furnished him grounds for entertaining a reasonable belief that some documents
which would be useful in the investigation or proceeding under the Act were
secreted in the house of the appellants and he was, therefore, fully justified
in issuing the search warrant.
[975E-H 976A-B] Calcutta Discount Co Ltd. v. Income
Tax Officer Companies District 1, Calcutta & Anr. 41 ITR 191 and R.S.
Seth Gopikrishan Agarwal v. R.N. Sen,
Assistant Collector of Customs & Ors., [1967] 2 SCR 340 relied upon.
4. Section 37(2) provides that the provisions
of the Code of Criminal Procedure relating to searches, shall so far as may be,
apply to searches directed under section 37(1). Reading the two sections
together, means that the methodology prescribed for carrying out the search
provided in section 165 has to be generally followed. The expression 'so far as
may be' has always been construed to mean that those provisions may be
generally followed to the extent possible. If section 165(1) was to be
incorporated by pen and ink as sub-section (2) of section 37, the legislature
would have provided that the provisions of the Code relating to searches shall
apply to the searches directed or ordered under section 37(1) except that the
power will be exercised by tho Director of Enforcement or other officer
exercising his power and he will be substituted in place of the Magistrate- The
provisions of sub-section (2) of section 37 has not been cast in any such
language. It merely provides that tho search may be carried out according to
tho method prescribed in section 165 (1). [979E-H;980A-B]
5. If it was the intention that reasons which
furnish grounds for entertaining a reasonable belief were to be recorded in
advance, appropriate words could have been incorporated in section 37(1),
otherwise a simple one line section would have been sufficient that all
searches as required for the purpose of this Act shall be carried out in the
manner prescribed in section 165 of the Code by the Officer to be set out in
tho section. [980C]
6. In order to give full meaning to the
expression 'so far as may be' sub-section (2) of section 37 should be
interpreted to mean that broadly the procedure relating to search as enacted in
section 165 shall be followed. But if a deviation becomes necessary to carry
out the purposes of the Act in which section 37(1) is incorporated, it would be
permissible except that when challenged before a court of law, justification
will have to be offered for the deviation. [980] R.S. Seth Gopikrishan v. R.N.
Sen, Assistant Collector of Customs & Ors., [1967] 2 SCR 340 and Pooran Mal
etc. v.
Director of Inspection (Investigation) of
Income Tax Mayur Bhavan, New Delhi & Ors., [1974] 2 SCR 705 followed, 972
H.L. Sibal v Commissioner of Income, Tax, Punjab an Ors., [1975] 101 ITR 112;
Commissioner of Commercial Taxes v. Ramkishan Shrikishan Jhaver 1966 ITR 664
referred to, New Central Jute Mills Co. Ltd. v. T.N. Kaul & Ors. AIR 1976
Cal. 178 held over-ruled.
7. The grounds which induced reasonable
belief need not be stated in the search warrant. In the instant case, the file
submitted to the court unmistakably shows that there was material enough before
the second respondent to form a reasonable belief which prompated him to direct
the search.
That the documents seized during the search
did not provide sufficient material to the officer for further action cannot be
a ground for holding that the grounds which induced the reasonable beli f were
either imaginary or fictitious or mala fide conjured up.[980E-G]
8. Legality in the method, manner or
initiation of a search does not necessarily mean that anything seized during
the search has to be returned. After all in the course of a search, things or
documents are required to be seized and such things and documents may furnish
envidence . Illegality of the search does not vitiate the evidence collected
during such illegal search. The only requirement is that the court or the
authority before which such material or evidence seized during the search shown
to be illegal, is placed has to be cautious and circumspect in dealing with
such evidence or material. [981B-F] Radhakishan v. State of U.P.-, [1963] Supp-
1 SCR 408 at 411; and State of Maharashtra v. Natwarlal Damodardas Soni, [1980]
4 SCC 669 relied upon.
9. The mere fact that during the pendency of
the writ petition before the High Court - the Enforcement Directorate decided
to close the proceedings against appellant in respect of the material seized
during the search, would not show that the search was mala fide or for reasons
irrelevant or extraneous the exercise of power.
There is no warrant for the assertion that
every search must result in seizure of incriminating material- There can be
cases in which search may fail or a reasonable explanation in respect of the
documents may be forthcoming. [982B-E] In the instant case, as the documents and
other materials have been sealed under the warrant of authorisation issued
under section 132-A of the Income Tax Act, the Enforcement Directorate may
legitimately case the proceedings. [982E-F] Pooran Mal etc. v. Director
Inspection (Investigation) of Income Tax Mayur Bhavan, New Delhi & Ors,
[1974] 2 SCR 705; and Income Tax Officer, Special Investigation Circle-B,
Meerut v. M/s Seth Brothers & Ors., [1970] 1 SCR 601 relied on.
10. If the officer who issued the search
warrant had material for forming a reasonable belief for the exercise of the
power, the search cannot be styled as illegal and, therefore, no case is made
out for directing return of documents on the supposition that the search and
seizure were illegal. [982G: 983A] 973
11. The allegations of mala fides in the
instant case were scanty and vague and completely misleading averments were
made to support such a serious allegations against a responsible officer
discharging his duties. A nefarious attempt had been made to cook-up a wholly
imaginary allegation for attributing personal mala fides to the sixth
respondent. In the circumstances the allegation cannot stand.
CIVIL APPELLATE JURISDICTION: Civil Appeal No.1138
of 1981.
From the Judgment and Order dated 22.9. 1980
of the Punjab and Haryana High Court in W. P. No. 2163 of 1980. Appellant-in-person.
M. M. Abdul Khader, V. S. Desai, Ms. A.
Subhashini, and R. N. Poddar for the Respondents.
The judgment of the Court was delivered by
DESAI, J. Appellants who are husband and wife respectively moved Civil Writ
Petition No. 2163 of 1980 in the High Court of Punjab and Haryana praying for
quashing of a search warrant issued by respondent No. 2- Assistant Director,
Enforcement on August 24, 1979 as also the warrant of authorisation issued by
respondent No, 5 - Commissioner of Income Tax, Jullandur on April 9, 1980 and
for a direction to return articles seized during the search of his house on
August 24, 1979 and for relief incidental and ancillary thereto.
Briefly stated, the allegations were that respondent
No. 6- Shri J. S. Ahuluwalia, Assistant Commissioner of Income-tax at Jullundur
bore personal malice towards the appellants, amongst others, attributable to an
incident concerning the servant of the appellants and an application for
transfer of appeals pending before him made to the Chairman, Central Board of
Direct Taxes by the first appellant. Actuated by this personal malice,
respondent No. 6 first instigated respondent No. 2 to issue a search warrant
under the authority of which a raid was carried out at the residence of the
appellants on August 24, 1979 which led to the seizure of certain documents
including some foreign currency. Thereafter, when the 794 appellants made
various representations for return of documents, again instigated by respondent
No. 6, respondent No' S issued a warrant of authorisation under sec. 132A of
the Income Tax Act on April 9, 1984 by which respondent No.
2 was directed to deliver such rooks of
accounts and other documents and goods seized during the search to the
requisitioning officer As the documents and material seized during the search
had not been returned, the writ petition as aforementioned was filed or the
reliefs hereinabove set out.
When the writ petition came. up before a
Divisional Bench of the Punjab and Haryana High Court, Mr. Kuldeep Singh,
learned counsel who appeared on behalf of the Directorate of Enforcement
Department made a statement that the Directorate has closed the proceedings and
does not want to take any action against the appellants on account of the
search. The High Court observed that in view of this statement, the Directorate
of Enforcement would normally be required to return the seized material to the
appellants but it was noticed that as the same was sealed under a warrant of
authorisation issued under Sec. 132A of the Income Tax Act, an order for return
of the same cannot be made. The High Court also took note of the statement made
by Mr. D.N. Avathy that the Income Tax Department was still scrutinising the
seized documents The High Court was of the opinion that there was nothing
illegal in the issuance of search warrant, the consequent search, the seizure
during the search and taking over of, the documents by the Income Tax
Department under sec. 132A. The High Court accordingly dismissed the petition.
Hence this appeal by special leave.
Dr. Partap Singh, the first appellant who
appeared in person submitted that respondent No 2 acted in a manner contrary to
law in issuing a search warrant when there was no material before him on which
he could entertain a reasonable belief that any documents which in his opinion
will be useful for, or relevant to, in investigation or proceedings under
Foreign Exchange Regulation Act.1973 (Act for short) are secreted in any place,
whereupon alone he may authorise any officer of Enforcement to search for and
seize or may himself search for and seize such documents. It was also contend
that as the second respondent did not record his reasons in writing on which
reasonable belief was entertained, the search warrant issued by him was
illegal.
975 Sec. 37 of the Act confers power on any
officer of Enforcement not below the rank of Assistant Director of Enforcement
to search premises. This power can be exercised if the officer has reason to
believe that any documents which in his opinion will be useful for, or relevant
to, any investigation or proceedings under the Act, are secreted in any place.
The appellant contended that no material was placed on record which may permit
an inference that the second respondent had reason to believe that any
documents which in his opinion would be useful for or relevant to any
investigation or proceeding under the Act were secreted in the house of the
appellants. It was urged that respondent No. 6 who was actuated by personal
malice towards the appellants and who being a friend of respondent No. 2
instigated and provoked him to- exercise this power of search and seizure not
to effectuate any purpose for which power is conferred but with a view to
humiliating and harassing the appellants.
A little while after, we will examine the
allegation of personal malice. Suffice it to say that there is no substance in
the allegation.
Respondent No. 2 is a responsible officer
being the Assistant Director, Enforcement, Foreign Exchange Regulation Act
stationed at Jullundur. He issued the impugned search warrant which led to the
seizure. In the affidavit in reply on behalf of the respondents Nos. l to 4, it
was clearly stated that search was authorised by the second respondent after he
was fully satisfied on the basis of the information available in the official
record and also on the basis of the information collected by the officers of
the Enforcement Directorate after making enquiries. lt was repeated in para 14
of the affidavit-in-reply,`that on the basis of the official record and
reliable information in possession of respondent No 2, he entertained a
reasonable belief for issuing the search warrant against the appellants.
Respondent No. 2, it was said, on the basis
of the information available on the file had reasons to believe that
incriminating documents were secreted in the residential premises of the first
appellant and the documents which were seized by Enforcement Directorate were
useful for the investigation undertaken by the office. He undertook to produce
the relevant records for the inspection of the court at the time of the hearing
of the petition.
Relying on this statement in the affidavit in
reply, the appellant contended that no record was shown to the court as
promised therein. We therefore, 976 adjourned the matter to a later date and
directed the learned counsel for respondents Nos. l to 4 to produce the file.
Original papers were shown to us and typed copies were furnished to the court.
We have minutely gone through the file and we are fully satisfied that there
was material before the second respondent which would furnish him grounds for
entertaining a reasonable belief that some documents which could be useful in
the investigation or proceeding under the Act were secreted in the house of the
appellants.
He was therefore, fully justified in issuing
the search warrant.
The appellant contended that in order to
justify that the power of search was exercised in a fair and just manner and to
effectuate the purpose for which it is conferred as is evident from the
language employed in sec. 37, the officer issuing the search warrant must
disclose what material was before him on which he entertained a reasonable
belief to move into the matter. Proceeding along it was submitted that neither
in the search warrant nor in the affidavit in opposition in the High Court, the
material on which reasonable belief was entertained was disclosed. It was
submitted that the affidavit merely recites in a mechanical manner the language
of the section which cannot be held sufficient for discharging the burden on
the party which has exercised this power of search and seizure. In this
connection, lastly it was submitted that if the court is going to look into the
file, produced on behalf of the second respondent, the same must be disclosed
to the appellants so that they can controvert any false or wholly unsustainable
material set out in the file.
When an officer of the Enforcement Department
proposes to act under Sec. 37 undoubtedly, he must have reason to believe that
the documents useful for investigation or proceeding under the Act are
secreted. The material on which the belief is grounded may be secret, may be
obtained through Intelligence or occasionally may be conveyed orally by
informants. It is not obligatory upon the officer to disclose his material on
the mere allegation that there was no material before him on which his reason
to believe can be grounded. The expression 'reason to believe' is to be found
in various statutes. We may take note of one such. Sec. 34 of the Income Tax
Act, 192. inter alia provides that the Income Tax officer must have 'reason to
believe' that the incomes, profits or gains chargeable to income-tax have been
under-assessed, then alone he can take action under sec.
34. In S. Narayanappa V. Commissioner of
Income Tax, 977 Bangalore(1) the assessee challenged the action taken under
sec. 34 A and amongst others it was contended on his behalf that the reasons
which induced the Income-tax Officer to initiate proceedings under sec. 34 were
justiciable, and therefore, these reasons should have been communicated by the
Income Tax Officer to the assessee before the assessment can be reopened. It
was also submitted that the reasons must be sufficient for a prudent man to come
to the conclusion that the income escaped assessment and that the court can
examine the sufficiency or adequacy of the reasons on which the Income Tax
Officer has acted. Negativing all the limbs of the contention, this Court held
that 'if there are in fact some reasonable grounds for the Income Tax Officer
to believe that there had been any non-disclosure as regards any fact, which
could have a material bearing on the question of under-assessment, that would
be sufficient to give jurisdiction to the Income Tax Officer to issue notice
under sec. 34. The Court in terms held that whether these grounds are adequate
or not is not a matter for the court to investigate.' The expression 'reason to
believe' is not synonymous with subjective satisfaction of the Officer. The
belief must be held in good faith; it cannot be merely be a pretence. In the
same case, it was held that it is open to the court to examine the question
whether the reasons for the belief have a rational connection or a relevant
bearing to the formation of the belief and are not extraneous or irrelevant to
the purpose of the section. To this limited extent the action of the Income Tax
Officer in starting proceedings under Sec. 34 is open to challenge in a court
of law. (See Calcutta Discount Co. Ltd. v. Income Tax Officer Companies
District 1, Calcutta & Anr.(2) In R. S. Seth Gopikrishan Agarwal v.
R. N. Sen, Assistant Collector of Customs
& Ors.,(3) this Court repelled the challenge to the validity 1 of the
search of the premises of the appellant and the seizure of the documents found
there in. The search was carried out under the authority of an authorisation
issued under Sec. 126 (L) (2) of the Defence of India (Amendment) Rules, 1963
(Gold Control Rules) for search of the premises of the appellant.
The validity of the authorisation was
challenged on the ground of mala fides as also on the ground that the
authorisation did not expressly employ the (1) (1967] 1 SCR 590.
(2) 41 ITR 191.
(3) [1967] 2 SCR 340 978 phrase reason to
believe' occurring in Sec. 105 of the Customs Act. Negativing both the
contentions, Subba Rao, C. J. speaking for the court observed that the subject
underlying Sec. 105 of the Customs Act which confers power for issuing
authorisation for search of the premises and seizure of incriminating articles
was to search for goods liable to be confiscated or documents secreted in any
place, which are relevant to any proceeding under the Act. The legislative
policy reflected in the section is that the search must be in regard to the two
categories mentioned in the section. The court further observed that though
under the section, the officer concerned need not give reasons if the existence
of belief is questioned in any collateral proceedings he has to produce
relevant evidence to sustain his belief.A shield against the abuse of power was
found in the provision that the officer authorised to search has to send
forthwith to the Collector of customs a copy of any record made by him.
Sub-sec. (2) of Sec. 37 of the Act takes care for this position inasmuch as
that where an officer below the rank of the Director of Enforcement carried out
the search, he must send a report to the Director of Enforcement. The last part
of the submission do. s not commend to us because the file was produced before
us and as stated earlier, the Officer issuing the search warrant had material
which he rightly claimed to be adequate for forming the reasonable belief to
issue the search warrant.
lt was however contended that when sub-sec.
(2) of Sec. 37 is read in juxtaposition with sub sec. (l), the legislative
mandate clearly manifests itself that before issuing a search warrant in
exercise of the power conferred by Sec. 37 (1), it is obligatory upon the
officer issuing the search warrant to record in writing the grounds of his
belief and specifying in such writing, so far as possible, the thing for which
search is to be made because Sec. 37 (2) provides that the provisions of the
Code of Criminal Procedure, 1898 (now 1973) relating to searches, shall, so far
as may be, apply to searches under this section subject to the modification
that sub-sec. (5) of Sec. 165 of the said Code shall have effect as if for the
word 'Magistrate', wherever it occurs, the words "Director of Enforcement
or other officer exercising his power" is substituted. It was submitted
that if the power to search premises is conferred on the officer therein
mentioned, it is hedged in with a condition that in exercise of the power he is
bound by the requirements of Sec. 165 of the Code. In other words, it was said
that by sub-sec. (2) of Sec. 37, Sec. 165 of 979 the Code is incorporated in
pen and ink in Sec. 37. It was urged that the section should be re-read as Sec.
37 (1) as it is and Sec. 165 A (I) of the Code be read as Sec. 37 (2).
Continuing along this line, it was submitted
that read thus, the necessary intendment of the Legislature becomes revealed in
that such drastic power of search and seizure without notice to the person
affected, can be exercised, if the officer has reason to believe which must
have its foundation on some material or grounds which must be stated in the
search warrant itself or in a record anterior to the issuance of the search
warrant so that when questioned the contemporaneous record would be available
to the court to examine the contention whether there was material for taking
such a drastic action or that the action was taken for extraneous and
irrelevant reasons. In support of this submission, reliance was placed on a
decision of the Punjab and Haryana High Court in H.L. Sibal v. Commissioner of
Income Tax, Punjab & Ors.(l) The court was examining the expression 'in
con. sequence of information in his possession, has reason to believe' in Sec.
132 of the Income Tax Act, 1961. The Court after referring to the decision of
this Court in Commissioner of Commercial Taxes v. Ramkishan Shrikishan
Jhaver(2) held that the obligation to record in writing, the grounds of the
belief as enjoined by Sec. 165 (1), if not complied with would vitiate the
issuance of search warrant and the seizure of the articles'. It was then
submitted that if the search is illegal, anything seized during such an illegal
search has to be returned as held by a learned Single Judge of the Calcutta
High Court in New Central Jute Mills Co. Ltd. v. T. N. Kaul & Ors.(3) Sec.
37 (2) provides that 'the provisions of the Code relating to searches, shall so
far as may be, apply to searches directed under Sec. 37 (1). Reading the two
sections together it merely means that the methodology prescribed for carrying
out the search provided in Sec. 165 has to be generally followed. The
expression 'so far as may be' has always been construed to mean that those
provisions may be generally followed to the extent possible. The submission
that Sec, 165 (1) has been incorporated by pen and ink in Sec. 37 (2) has to be
negatived in view of the positive language employed in the section that the
provisions relating to searches shall so far as may be apply
(1) [1975] 101 ITR 112.
(2) [1966] ITR 664.
(3) AIR 1976 Cal. 178.
980 to searches under Sec. 37 (1). If Sec.
165 (1) was to be incorporated by pen and ink as sub-sec. (2) of Sec. 37, the
legislative draftsmanship will leave no room for doubt by providing that the
provisions of the Code of Criminal Procedure relating to searches shall apply
to the searches directed or ordered under Sec. 37 (1) except that the power
will be exercised by the Director of Enforcement or other officer exercising
his power and he will be substituted in place y f the Magistrate. The
provisions of sub-sec. (2) of Sec. 37 has not been cast in any such language.
It merely provides that the search may he carried out according to the method
prescribed in Sec. 165 (1). If the duty to record reasons which furnish grounds
for entertaining a reasonable belief were to be recorded in advance, the same
could have been incorporated in Sec. 37 (1), otherwise a simple one line
section would have been sufficient that all searches as required for the
purpose of this Act shall be carried out in the manner prescribed in Sec. 165
of the Code by the officer to be set out in the section. In order to give full
meaning to the expression 'so far as may be', sub-sec. (2) of Sec.
37 should be interpreted to mean that broadly
the procedure relating to search as enacted in Sec. 165 shall be followed.
But if a deviation becomes necessary to carry
out the purposes of the Act in which Sec. 37 (1) is incorporated, it would be
permissible except that when challenged before a court of law, justification
will have to be offered for the deviation. This view will give full play to the
expression 'so far as may be'.
The view which we are taking is in accord
with the view taken in Gopikrishan Agarwal's case. The grounds which induced
reason able belief therefore need not be stated in the search warrant.
Assuming that it was obligatory to record
reasons in writing prior to directing the search, the file submitted to the
court unmistakably shows that there was material enough before the officer to
form a reasonable belief which prompted him to direct the search. That the
documents seized during the search did not provide sufficient material to the
officer for further action cannot be a ground for holding that the grounds
which induced the reasonable belief were either imaginary of fictitious or mala
fide conjured up.
Assuming that it is obligatory upon the
officer proceeding to take search or directing a search to record in writing
the grounds of his belief and also to specify in such writing, so far as
possible, the thing for which the search is to be made, is mandatory and that
non 981 recording of his reasons would result in the search being condemned as
illegal, what consequence it would have on the seizure of the documents during
such illegal search. The view taken by a learned Single Judge of the Calcutta
High Court in New Central Jute Mills Co. Ltd. case that once the authorisation
for carrying out the search is found to be illegal on account of the absence of
recording reasons in the formation of a reasonable belief, the officer who has
seized documents during such search must return the documents seized as a
result of the illegal search is against the weight of judicial opinion on the
subject and does not commend to us. In fact this decision should not detain us
at all because virtually for all practical purposes, it can be said to have
been overruled by the decision of the Constitution Bench in Pooran Mal etc. v
Director of Inspection (Investigations) of Income Tax Mayur Bhavan, New Delhi
& Ors.(1) This Court held that 'courts in India and even in England have
consistently refused to exclude relevant evidence merely on the ground that it
is obtained by illegal search or seizure.' If therefore, the view of the
learned Single Judge of the Calcutta were to be accepted meaning thereby that
if the search is shown to be illegal, anything seized during such illegal
search will have to be returned to the per- son from whose premises the same
was seized. It would tantamount to saying that evidence collected during
illegal search must be excluded on that ground alone. This was in terms
negatived by the Constitution Bench. It has been often held that the legality
in the method, manner or initiation of a search does not necessarily mean that
anything seized during the search has to be returned. After all in the course
of a search, things or documents are required to be seized and such things and
documents when seized may furnish evidence. Illegality of the search does not
vitiate the evidence collected during such illegal search. The only requirement
is that the court or the authority before which such material or evidence
seized during the search shown to be illegal. is placed has to be cautious and
circumspect in dealing with such evidence or material. This is too
well-established to necessitate its substantiation by a precedent. However, one
can profitably refer to Radhakishan v. State of U.P.(2) wherein the court held
that assuming that the search was illegal the seizure of the articles is not
vitiated. It may be that because of the illegality of the search the court may
be inclined to (1) [1974] 2 SCR 705.
(2) [1963] Supp 1 S.C.R. 408 at 411 982
examine carefully the evidence regarding seizure, but no other consequence
ensues. (See State of Maharashtra v.
Natwarlal Damodardas Soni.(1) In this behalf,
the appellant further contended that if the 1 search was genuine or bona fide
for carrying out the purposes of the Act, it is surprising that when the matter
was before the Might Court the Enforcement Directorate submitted that it does
not wish to take any further action in respect of the material seized during
the search. There is no warrant for the assertion that every search must result
in seizure of incriminating material. Such an approach would be a sad
commentary on human ingenuity. There can be cases in which search may fail or a
reasonable explanation in respect of the documents may be forthcoming.
In Income Tax officer, Special Investigating
Circle.B,- Meerut v. M/s Seth Brothers & Ors.,(2) it was in terms held that
'from amongst the documents seized during the search, if some are found not to
be useful for or relevant to the proceeding, that by itself will not vitiate
the search. Nor can an inference be made that the power was initially exercised
mala fide.' The Cour in Puran Mal's case held that if the books of account and
other documents collected during the search were after words found to be not
relevant that by itself does not make the search and seizure illegal. In this
case, however as the documents and other materials have been sealed under the warrant
of authorisation issued under Sec.
132 A of the Income Tax Act, the Enforcement
Directorate may legitimately close the proceedings. We cannot move back ward
and conclude that if no further proceedings are taken, at the inception the
search was malafide or for reasons irrelevant or extraneous. the exercise of
power. The contention therefore, must be rejected. Having examined all the
limbs of the submission, we find no merit in the contention that the issuance
of search warrant was illegal or the search was illegal and invalid.
It was next urged that if there was no
justification for issuing a search warrant, the search under the authority of
such a warrant would be illegal and the respondents 1 to 4 are bound to return
the documents. If the officer who issued the search warrant had material for
forming a reasonable belief to exercise the power the search (1) [1980] 4
S.E.C. 669 (2) [1970] 1 S.C.R. 601.
983 cannot be styled as illegal and
therefore, no case is made out for directing return of the documents on the
supposition that the search and seizure were illegal.
The next submission was that respondent No. 6
was actuated by a personal malice and with a view to harassing and humiliating
the appellants instigated and provoked his friend, the second respondent to
issue the search warrant and to carry out the search. In the petition filed in
the High Court the allegations of mala fides are so scanty that the High Court
was justified in not examining the contention on merits. In para 6 of the
petition, it is stated 'that the petitioners own house No. 531 in New Jawahar
Nagar, Jullundur while respondent No. 6 occupies the adjoining house. It is
attitude towards the petitioners was inimical and has ever been so. Some
appeals filed by the appellants against their assessments under the Wealth Tax
were pending before the sixth respondent and that 'on May 29, 1979, the first
appellant submitted a representations to the Chairman, (Central Board of Direct
Taxes complaining about the animosity of the sixth respondent towards the first
appellant and requested that those appeals pending before the sixth respondent
be transferred to another appellate court'. These are all the relevant
averments on the allegation of mala fides. When attention of the first
appellant was drawn to this scanty material, he drew our attention to the
averments in para 6 of the petition for special leave wherein it is alleged
'that when the petitioners were away from Jullundur leaving their servant Gyan
Chand to look after their house, the servant of respondent No. 6 left his job
whereupon respondent No. 6 nursed a feeling that his servant had left the job
on being tutored by the petitioner's servant. Thereupon respondent No. 6 got
Gyan Chand detained and maltreated by the police.
When the petitioners learnt about it at
Bombay, they requested a common friend to get Gyan Chand released and in fact
Gyan Chand was released. It was then stated that the friend contacted the
Police Officer who had detained Gyan Chand and before him, the Police Officer
admitted that Gyan Chand was detained at the instance of the sixth,
respondent.' Could there be more vague and completely misleading averments to
support serious allegation of personal mala fide against the officer
discharging his duties ? We are not inclined to dilate any more on this aspect
save and except saying that the affidavit of Gyan Chand is not forth-coming,
that the name of the friend is not mentioned and 984 the Police Officer cannot
be identified from the material disclosed in the petition. One can only say
that a nefarious attempt has been made to cook up a wholly imaginary allegation
for attributing personal mala fides to the sixth respondent. The contention
must be negatived without further examination, It was lastly urged that there
has been tampering with the documents by the officers of the Enforcement
Directorate while the Income Tax Officer scaled and took possession of the
documents under the authority of warrant of authorisation issued by the fifth
respondent under Sec. 132A of the Income Tax Act. It was submit ted that the
documents with which the appellants were not concerned have been foisted upon
him and some documents have been removed.
Though the submission was made at some
length, Mr. Desai, learned counsel appearing for some of the respondents
dispelled whatever little doubt was generated in our mind by the submissions of
the first appellant He referred to Pass Book Account Nos. 132269 and 159431,
both issued by the Bank of India and urged that what was mentioned was not the account
number but the Pass Book numbers and the Account Nos. SB 6731 and SB 7626 both
tally and therefore, the submission in this behalf is misconceived. We accept
the same. It was then urged that there were some erasures in some of the loose
sheets. We found none. After referring to pages 148, 149 and 150 of the diary.
an argument was attempted to be built up that there is some tinkering with the
same. We found the submission wholly imaginary.
Therefore, there is absolutely no merit in
the contention that there has been some tampering with the documents when they
were sealed under the authority of the warrant of authorisation issued by the
Commissioner of Income Tax.
These were all the contentions raised in this
appeal and as there is no merit in any of them, the appeal fails and is
dismissed but with no order as to costs.
A.P.J. Appeal dismissed.
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