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Report No. 47

15.36. Cancellation of passport during investigation.-

In one respect however, the power of cancellation of passports must be augmented. Where the presence of the accused is required for investigation for any offence, there should be a power to cancel the passport.1 There should of course, be a certificate to that effect by a senior officer, in order to avoid harassment in small cases. We recommend the addition of the following clause in section 10(3), Passports Act to achieve the above object:-

"(ee) if an officer of such rank as the Central Government may notify in this behalf certifies that an investigation in respect of an offence alleged to have been committed by the holder of the passport or travel document is pending before any authority in India and that the continued presence in India of the holder of the passport or travel document is necessary in the interest of the efficient conduct and completion of the investigation."

1. Position in England is controversial. See Ghani v. Jones, (1969) 3 All ER 1700 (CA).

15.36A. Section 19D, Foreign Exchange Act considered.-

The Foreign Exchange Act contains extensive powers of search. We need not discuss them in detail, but some points raised during oral discussions require consideration.

First, we shall take up the section relating to power to search premises, which is as follows1:-

"19D. Power to search premises-(1) If an Officer of Enforcement, not below the rank of Assistant Director of Enforcement, has reason to believe that any document which in his opinion will be useful for or relevant to any proceeding under this Act are secreted in any place he may authorise any Officer of Enforcement to search for and seize or may himself search for and seize such documents.

(2) The provisions of the Code of Criminal Procedure, 1898, relating to searches under this section subject to the modification that sub-section (5) of section 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 powers" were substituted."

1. Section 19D, Foreign Exchange Act.

15.36B. Some difficulty, it seems, is caused by the words 'reason to believe', which occur in sub-section (1); and the question that has arisen is, how far the belief of the concerned officer is subject to scrutiny by the courts. It has been suggested that the wording should be changed so as to eliminate such scrutiny.

15.36C. It must, however, be stated that questions of constitutional validity of the power of search as granted by provisions containing above expression are, by their nature, difficult ones. This will be apparent from a study of-

(1) the provisions as to searches in other Acts.

(2) Judicial decisions as to the validity of such provisions in other Acts.

(3) The extent to which those decisions hinge on expressions such as 'reason to believe', 'is of opinion', 'has reasonable grounds for believing' and the like.

(4) The extent to which safeguards provided in section 165, Cr. P.C. are to be read into those provisions.

(5) The situation in which and the purpose for which the power of search under the particular provisions is to be exercised.

15.36D. We, therefore, examined a number of decisions dealing with search, including:

(1) I.T.O. v. Seth Brothers, 74 ITR 836: AIR 1970 SC 292, (Section 132, Income-Tax Act).

(2) Balwant Singh v. Director of Inspection, AIR 1969 Del 91 (103, 110), (Section 132, Income-Tax Act).

(3) Gopikishan v. Assistant Collector, AIR 1967 SC 1298 (1301), paras. 10-11, (Section 105, Customs Act).

(4) Pukhraj v. Kohli, AIR 1962 SC 1559, (Section 178A, Sea Customs Act, 1878).

(5) State of Rajasthan v. Rehman, AIR 1960 SC 210, (Section 18, Central Excise Act).

(6) Durga Prasad v. Gomes, AIR 1966 SC 1214, (Gold Control Rules and sections 105 and 110 of the Customs Act).

(7) Board of Revenue v. R.S. Jhaver, AIR 1968 SC 59, (Madras General Sales Tax Act).

(8) Bai Radha v. State of Gujarat, AIR 1970 SC 1396, (Section 15, Suppression of Immoral Traffic Act).

(9) Nil Ratan v. Lakshmi Narayan, AIR 1965 SC 1, [Section 19(3), Foreign Exchange Act before amendments].

(10) K.E. v. Vimalbai Deshpande, 73 IA 144 (PC), [Rule 129(1), Defence of India Rules, 1939].

(11) Hindustan Motors v. T.N. Kaul (decided on 25-3-71) (Unreported). (Calcutta High Court) (DB), (Section 19D, Foreign Exchange Act).

(12) Chic Fashions (West Wales Ltd. v. Jones, (1968) 2 QB 299 (CA).

(13) Ghani v. Jones, (1969) 3 All ER 1700 (CA).

(14) N.C.J. Mills C. v. Collector, Central Excise, AIR 1971 SC 454, [Section 12, Central Excise, & Salt Act, 1944, and sections 105(1) and 110(3) of Customs Act, 1962 in matters relating to search of premises].

(15) G.L. Gupta v. Assistant Collector, Customs, AIR 1971 SC 29, 'Section 23C(1), Foreign Exchange Regulation Act, 1947).

(16) Jayantlal v. Union of India, AIR 1971 SC 1193, [Sections 116(2), Gold (Control) Act, and rule 126(1) of the Gold Control Rules, 1963].

(17) Union of India v. Tara Chand Gupta & Bros., AIR 1971 SC 1559. [Section 3, Imports and Exports (Control) Act, 1947].

(18) Dwarka Nath v. Dean Municipality, AIR 1971 SC 1844, [Section 23(1)(c), (f), (g) and (h) Prevention of Food Adulteration Act, 1954].

(19) Asstt. Collector of Customs v. Charan Das Malhotra, 1971(1) SCC 697, (Sections 110 and 124 of Customs Act, 1962).

(20) Badriprasad v. Collector of Central Excise, (1971) 2 SCC 1, [Sections 6, 8 and 1'6), Gold (Control) Act, 1968].

(21) P.P. v. Babulal, AIR 1971 AP 345, (Section 135, Customs Act, 1962).

(22) M. Narayana v. S.H. Officer, AIR 1971 AP 29, [Sections 150 4(1), 5(2) and 173, Criminal Procedure Code, and sections 7(1)(a)(ii) and 10A, Essential Commodities Act, 1955].

(23) K. Lakshminarayanan v. Commissioner of Income-tax, AIR 1971 Mad 192, [Section 256(2), Income-Tax Act, 1961].

(24) Mangilal v. Dy. Excise Officer, AIR 1971 Raj 46, [Section 256(2), Income-Tax Act, 1961].

(25) T. Jacob v. State, AIR 1971 Ker 166, [Sections 7(1), 8 and 2 (f), and section 15(1) of the Suppression of Immoral Traffic in Women and Girls Act, 1956].

15.36E. In England also, statutory powers to issue search warrants differ markedly in the conduct which they authorise. For examples, the Theft Act, 1968, enables a constable to seize the articles specified in the warrant or any other articles which he "reasonably believes to be stolen". Similarly, the Firearms Act, 1968, authorises the constable to whom it is issued to seize and detain any firearm or ammunition which he may find on, inter alia, the premises or place and in respect of which he has 'reasonable grounds for suspecting' that a firearms offence has been, is being, or is about to be committed. The like wording is employed in legislation dealing with drugs,1 obscene publications2, explosives3, and official secrets.4

1. Section 14, Dangerous Drugs Act, 1965.

2. Section 3, Obscene Publications Act, 1959.

3. (a) Section 73, Explosives Act, 1875. (b) Section 55, Malicious Damage Act.

4. Section 9, Official Secrets Act, 1911.

15.36F. Writing in 1967, Mr. D.A. Thomas, concluded1 that " the law consists of a mass of statutory provisions, to which judicial decisions add confusion rather than clarity." The decisions of the Court of Appeal in Chic Fashions (West Wales) Ltd. v. Jones, (1968) 2 QB 229, and Ghani v. Jones, (1968) 3 All ER 1700. have rendered the law still less certain.

15.36G. A study of decided cases shows that while the position cannot be asserted definitely, one could venture to put forth the following propositions as reflecting, broadly ple view taken in most cases.

(a) The expression 'reason to believe', does not mean purely the subjective satisfaction of the officer concerned.

(b) The existence of the belief and the existence of the reasons for the belief are justiciable.

(c) The sufficiency of the reasons is not, however, justiciable.

There is no doubt, that in the interests of efficient investigation of these grave offences, the scope for such controversies should be reduced to the minimum. Arbitrary, capricious or mala fide exercise of the power of search should not be countenanced. At the same time, practical considerations require that the power under the Foreign Exchange Act should be couched in terms less rigid than at present. After careful consideration, we have come to the conclusion that the words 'honestly believes' should be substituted in place of the words 'has reason to believe'.

15.36H. We have not overlooked the fact that an amendment substituting a milder wording increases the vulnerability of the provision from the point of view of conflict with the fundamental rights guaranteed by Article 19(1)(f) and (g) of the Constitution. But, having regard to the fact that the power is vested in an officer not below the rank of Assistant Director of Enforcement, we venture to take the view that the restriction will continue to be regarded as reasonable, even after the amendment which we have recommended. The provision, moreover, is linked up with usefulness or relevance of the document to proceedings under the Act,-though that requirement is itself indicated in terms which contemplate the subjective opinion of the officer concerned.

We, therefore, recommend an amendment of section 19D, Foreign Exchange Act, accordingly.

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