Full Judgment Text
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PETITIONER:
RAMANLAL BHOGILAL SHAH AND ANOTHER
Vs.
RESPONDENT:
D. K. GUHA AND OTHERS
DATE OF JUDGMENT24/01/1973
BENCH:
SIKRI, S.M. (CJ)
BENCH:
SIKRI, S.M. (CJ)
RAY, A.N.
PALEKAR, D.G.
BEG, M. HAMEEDULLAH
DWIVEDI, S.N.
CITATION:
1973 AIR 1196 1973 SCR (3) 438
1973 SCC (1) 696
CITATOR INFO :
E 1981 SC 379 (62,69)
D 1992 SC1795 (8,13)
ACT:
Constitution of India, Art. 20(3)-Whether accused mentioned
in an F.I.R. is bound to appear before Enforcement officer
to give evidence in connection with the same offence.
HEADNOTE:
The point of law being same in both the writ petitions, the
facts of writ petition No. 164 of 1972 are as follows :-
The petitioner was the General Manager of United Comm. Bank
till January 17,1968 when he became its Chairman and
whole-time Director andafter nationalisation of the bank,
he was appointed Custodian thereof.
In 1966, theUnited Comm. Bank had booked a forward
exchange contractfor Hindustan Motors for pound 9,32,617
at the rate of Is. 529/32d. per rupee. Thereafter, the
rupee was devalued and on May 24, 1971 the petitioner was
served with summons under s. 19-F of the Foreign Exchange
(Regulation) Act, 1947 to give evidence in an enquiry held
by respondent No. 1 into certain offences under the Foreign
Exchange Act. The petitioner was examined on June 3, 16,and
17, 1971.
According to the petitioner, the entire examination on these
days related to the booking by the bank of the said forward
exchange contract.
On August 31, 1971, the petitioner was arrested under s. 19B
of the Foreign Exchange Act. Sub-s. 1 of S. 19B of the Act
provides that "if any officer of Enforcement .... has reason
to believe that any person in India etc., has been guilty
of an offence punishable under the Foreign Exchange Act, he
may arrest such person and shall, as soon as may be, inform
him of the ground of such arrest." Sub-sec. (2) provides
that every person arrested under sub section (1) shall,
without necessary delay, be taken to a Magistrate. Sub-s.
(3) empowers the officer concerned to release an arrested
person on bail and he has the same powers and as that of an
0/c of a police station. The grounds, served on the
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petitioner, for the offence under s. 4(2), and , under s. 22
of the Act punishable under s. 23, are elaborate. Paras 31
to 40 of the grounds of arrest are inter alia, :-conversion
of pound sterling not at the prescribed rate, false
information furnished to the Reserve Bank in contravention
of Sec. 22 of the Act etc.
[The question arose whether after these grounds had been
served on the petitioner, it could be said that he was a
person accused of an offence within Art. 20(3) of the
Constitution].
The petitioner was later produced before the Chief
Presidency Magistrate who released him on bail with a
direction that he should ,Contact the investigating officer
from time to time.
Thereafter, an F. I. R. was recorded under s. 154 Cr.P.C. by
the D.S.P., C.B.I., New Delhi and an order was obtained from
the
439
Chief Presidency Magistrate Calcutta permitting the
investigation to, be made under s. 155 (2) Cr. P. C. The
offences alleged in the F. 1. R. are s. 120B read with s.
420 1. P. C. and under s.4 (2) read with. s. 23(1) (b) of
the Exchange Act. The names and addresses of the. accused
were given as the Management and other officers of the
United Commercial Bank and the Management and officers of
Hindustan. Motors Ltd.
On April 17, 1972 another summons was issued to the
petitioner under s. 19F of the Exchange Act to appear before
the Enforcement Directorate and to give evidence regarding
the transaction of Exchange: Contract booked from Hindustan
Motors Ltd.
After objecting to appear before the Enforcement Directorate
as, witness the petitioner filed the present writ petition
before this Court. It was contended by the petitioner that
after the Enforcement officer had examined the petitioner
and put his conclusions in the grounds of arrest, the
petitioner was definitely a "person accused of an offence"
within the meaning of Art. 20(3) of the Constitution of
India and at any rate, the petitioner was accused of an
offence when the F.I.R. was recorded and therefore. the
summons dt. April 17, 1972 was illegal.
Allowing the petition,
HELD : (i) It is well settled that with the lodging of a
First Information Report a person is accused of an offence
Within the meaning of Art. 20(3). [445E-F]
Ramesh Chandra Mehta v. State of West Bengal [1969] 2 S.C.R.
461 Raja Naravanlal Bansilal v. Manack Phiroz Mistry [1961]
1 S.C.R. 417 and M. P. Sharma V. Satish Chandra, [1954]
S.C.R. 1077, referred to.
(ii)Although the petitioner is a person accused of an
offence within the meaning of Art. 20(3), the only
protection that Art. 20(3) give& to him is that he cannot be
compelled to be a witness against himself; but this does not
mean that he need not give information regarding matters
which do not tend to incriminate him. [446G-H]
State of Bombay v. Kathi Kalu Oghad, [1962] 3 S.C.R. 1032,
referred to.
Therefore in the present case the summons must not be set
aside. The petitioner must appear before the enforcement
Directorate and answer such questions as do not tend to
incriminate him. [447C-D]
JUDGMENT:
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ORIGINAL JURISDICTION : Writ Petitions Nos. 164 and 165 of.
1972.
Petitions under Art. 32 of the Constitution of India for
the enforcement of fundamental rights.
A.K. Sen, (in W.P. No. 164) B. Sen, (in W.P. No. 165)
Krishna Sen, S. R. Agarwala and R. K. Khanna, for the
petitioners.
F.S. Nariman, Additional Solicitor-General of India and
S. P. Nayar for the respondents.
The Judgment of the Court was delivered by
SIKRI, C.J. The same point of law arises in both the writ
petitions and it will suffice if facts in writ petition No.
164 of 1972 are set out. The petitioner, Ramanlal Bhogilal
Shah, was the Gene-
440
ral Manager of United Commercial Bank Ltd. till January 17,
1968 when he became the Chairman and whole time Director of
the said bank. Upon nationalisation of the bank, the
petitioner was appointed Custodian thereof and he continued
as Custodian till September 1, 1971.
On June 4, 1966 the United Commercial Bank had booked a
forward exchange contract for ’Hindustan Motors for pound
9,32,617 at the rate of 1s. 529/32d, per rupee. On June 6,
1966, the rupee was devalued. On May 24, 1971 the,
petitioner was served with summons under S. 19-F of the
Foreign Exchange (Regulation) Act, 1947-hereinafter referred
to as the Exchange Act to give evidence in the enquiry which
Shri D. K. Guha, Deputy Director, Enforcement Directorate,
was making into certain offences under the Exchange Act.
The petitioner was examined on June 3, 1971, June 16, 1971
and June 17, 1971.
According to the petitioner, the entire examination on the
said dates related to the booking by the United Commercial
Bank of the aforesaid forward exchange contract dated June
4, 1966. On August 31, 1971, the petitioner was arrested
under’s. 19B of the Exchange Act. Sub-section (1) of S. 19B
provides that "if any officer of Enforcement.. . . . has
reason to believe that any person in India or within the
Indian customs waters has been guilty of an offence
punishable under the Exchange Act, he may arrest such person
and shall, as soon as may be, inform him of the grounds for
such arrest." Sub-section (2) provides that "every person
arrested under sub-section ( 1) shall, without unnecessary
delay, be taken to a Magistrate." Sub-s. (3) empowered an
officer of Enforcement arresting any person to release such
person on bail or ,otherwise. In this connection he has the
same powers and is subject to the same provisions as the
officer-in charge of a police station.
The grounds of arrest served on the petitioner are
elaborate. These give detailed reasons why the enforcement
officer had reasons to believe that the petitioner had been
guilty of an offence under s. 4(2) and under S. 22 of the
Exchange Act punishable under s. 23 thereof. We may
reproduce paras 31 to 40 of the grounds of arrest.
"31. AND WHEREAS by such criminal acts the
Bank converted pound sterling not at the rate
prescribed by the Foreign Exchange Dealers
Association of India effective from 8-6-66 as
aforesaid but at the rate of Rs. 1-5 29/32d
Re. 1 during the period of 8-7-66 to 3-3-67 on
the total amount of pound 9,32,617-0-od;
32.AND WHEREAS the aforesaid amount of Pound
9,32,617-0-0d has been converted into Indian
cur-
441
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rency at rates other than the rates authorised
by the Reserve Bank of India;
33.AND WHEREAS such unauthorised conversion
has beenmade without fulfilling the
condition prescribed in Section XXVIII of the
Exchange Control Manual published by the
Reserve Bank of India as aforesaid.
34.AND WHEREAS such conversion of pound
sterling into Indian currencies has been made
in contravention of Section 4(2) of the said
Act;
35. AND WHEREAS false information has been
furnished to the Reserve Bank of India thereby
contravening the provisions of Section 22 of
the. said Act;
36.AND WHEREAS the aforesaid contraventions,
have been committed by the said Bank or have
taken place with the consent of the said R. B.
Shah;
37.AND WHEREAS at the time of the aforesaid
contraventions were committed, the said R. B.
Shah was in charge of, or was responsible to
the United Commercial Bank Limited for the
conduct of the business of the said Bank;
38 AND WHEREAS the said R. B. Shah failed to
prove in course of his statements made under
Section 19F of the said Act before Shri D. K.
Guha, Deputy Director of Enforcement that the
contravention took place without his knowledge
or that he exercised all due diligence to
prevent the aforesaid contravention, as
required under Section 23C of the said Act.
39 AND WHEREAS, in view of the aforesaid facts
,and circumstances, 1, Onkar Nath
Chattopadhyay, Enforcement Officer,
Enforcement Directorate, Department of
Personnel, Cabinet Secretariat, Government of
India, being an officer of Enforcement
authorised by the Central Government to
exercise the powers under, Section 19B of the
said Act, have reason to believe that the said
R. B. Shah in India has been guilty of
offences under Section 4(2) and under Section
22 of the said Act punishable under Section 23
of the said Act;
40.NOW, THEREFORE, I arrest the said R. B.
Shah on the grounds stated herein above, today
the 31st, August, 1971 at 10.35 a.m. under
Section 19E(1) of the Foreign Exchange
Regulation Act, 1947."
The question arises, with which we will presently deal with,
whether after those grounds have been served on the
petitioner,
442
it could be said that he was a person accused of an offence
within art. 20(3) of the Constitution.
The petitioner was produced before the Chief Presidency
Magistrate, Calcutta, on August 31, 1971, who released him
on bail of Rs. 10,000 with the direction that the petitioner
should contact the Investigating Officer every alternate day
during the next two weeks and thereafter as and when called
for.
On September 6, 1971, the Chief Presidency Magistrate,
Calcutta, recorded :
"Both accused are on C.B. and present.
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Perused report submitted by I.O. I.O. prays
for three months time for submitting further
report. Time allowed till 6-12-71 for
submission of report."
On December 6, 1971, the order is recorded as
follows
"Both accused are on C.B. and present.
Perused report submitted by Enforcement
Directorate. Further three months time. Time
allowed till 6-3-72 for completion of
investigation. I.O. is directed to expedite
and file complaint, if any, at an early date."
On March 6, 1972, it was inter alia ordered
".......Since no regular complaint has tiff
now been filed, personal exemption prayed for
is allowed.’
The order further proceed
"Considered I.O remand report. He submits
that concerned documents remain sealed in that
Court and He further says complaint will be
filed soon after the matter is disposed by the
Supreme Court. Considering such aspects of
the question I.O. is allowed time till 6-72
for a report about progress of investigation’
; and submission of, regular complaint, if
any, against;, the accused persons.’
It is alleged in the petition that "pursuant to enquiries
made in this behalf, your petitioner has: I come to learn
that the Supreme Court proceedings referred to by the,
respondent , No. 4 before the Chief. Presidency Magistrate,
Calcutta, as recorded in his order dated 6th March 1972
arose out of a writ petition filed by Hindusthan Motors Ltd.
before the Hon’ble High Court at Calcutta challenging inter
alia the search at the premises of Hindusthan Motors Ltd.
conducted by the Enforcement Directorate in or about,
October 1969 and the seizure of documents is a result
thereof." In the course of this enquiry the petitioner
learnt that a case had been registered on a First
Information Report dated
443
November 9, 1971, recorded under s. 154 of the Criminal Pro-
cedure Code and an order dated November 25,1971 had been
obtained, from the Chief Presidency Magistrate, Calcutta,
permitting the investigation to be made under s. 155 (2) of
the Code of Criminal Procedure. This First Information
Report deals with the forward exchange contract purported to
have been entered on June 4, 1966 by M/S Hindusthan Motors
Ltd. and the United Commercial Bank Ltd. The offences
alleged in the first Information Report are s. 120B read
with s. 420 I.P.C., and under s. (2) read with s. 23(1) (b)
of the Exchange Act, and the names and addresses of the
accused are given as the Management and other officers of
the United Commercial Bank and the Management and officers:
of the Hindusthan Motors Ltd.
On April 17, 1972 another summons was issued, to the peti-
tioner under s. 19-F of the Exchange Act to appear before,
the Deputy Director, Enforcement Directorate, on April 28,
1972 to give evidence relating to the transaction of
exchange contract booked from Hindusthan Motors Ltd. on June
4,1966. The petitioner wrote to the Deputy Director
submitting that the summons was violative of art. 20(3) of
the Constitution. In this connection he submitted as
follows
"I remind you that after examining on the 3rd
June, 1971, 16th June. 1971 and 17th June 1971
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proceedings have been initiated and I was
arrested on the 3 1st August, 1971 and in the
grounds of arrest one of the grounds of
accusation mentioned is the transaction
referred ’to by you in the summons."
The petitioner requested the Deputy Director to withdraw the
summons........
On April 22, 1972 the Deputy Director informed the
petitioner that the contentions had no substance at all. He
further informed the petitioner that the summons issued on
April 17, 1972 could not be withdrawn and requested the
petitioner to comply with the name.
The petitioner thereupon filed the present petition on
April,27, 1972.
The learned counsel for the petitioner, Mr. A. K. Sen, con-
tends that on the facts given above the petitioner fell
within the description of a "person accused of an offence"
within the meaning of art. 20(3). He contended that after
the Enforcement Officer had examined the petitioner and put
his conclusions in the grounds of arrest, the petitioner was
definitely accused of an offence under the Exchange Act. He
next contends that at any rate, the petitioner was accused
of an offence when the First
13-L796Sup.C.I./73
444
Information Report was recorded under S. 154, Cr. P.C., by
Shri J. N. Prabhakar, Deputy Superintendent of Police,
Central Bureau of Investigation, Special Police
Investigation Unit, New Delhi.
The learned Additional Solicitor General says that the first
point is concluded by the decision of this Court in Romesh
Chandra, Mehta v. State of West Bengal.(1) He strongly
relies on the following passage at p. 479
"It was strenuously urged that under s. 104 of
the Customs Act, 1962, the Customs Officer may
arrest a person only if he has reason to
believe that any person in India or within the
Indian Customs waters has been guilty of an
offence punishable under S. 135 and not
otherwise and he is bound to inform such
person of the grounds of his arrest. Arrest
of the person who is guilty of the offence
punishable under s. 135 and information to be
given to him amount, it was contended, to a
formal accusation of an offence and in any
case the person who has been arrested and who
have been informed of the nature of the
infraction committed by him stands in the
character of an accused person. We are unable
to agree with that contention. Section 104(1)
only prescribes the conditions in which the
power of arrest may be exercised. The officer
must have reason to believe that a person has
been guilty of an offence punishable under S.
135, otherwise he cannot arrest such person.
But by informing such person of the grounds of
his arrest the Customs Officer does not
formally accuse him with the commission of an
offence. Arrest and detention are only for
the purpose of holding effectively an inquiry
under S. 107 and 108 of the Act with a view to
adjudging confiscation of dutiable or
prohibited goods and imposing penalities. At
that stage there is no question of the
offender against the Customs Act being charged
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before a Magistrate. Ordinarily
after
adjuding penalty and confiscation of goods or
without doing so, if the Customs officer forms
an opinion that the offender should be
prosecuted he may prefer a complaint in the
manner provided under s. 137 with the sanction
of the Collector of Customs and until a
complaint is so filed the person against
whom an inquiry is commenced under the Customs
Act does not stand in the character of a
person accused of an offence under s. 135.
(1) [1969] 2 S.C.R. 461.
445
The learned counsel for the petitioner, however, contends
that the facts here are different. He says that under the
Exchange Act the position is slightly different. He further
says that in Romesh Mehta’s case(1) no enquiry had been made
while in the present case an enquiry under s. 19F had been
made and the Deputy Director had come to a definite
conclusion that the petitioner was guilty of an offence. He
further says that the next step would be an enquiry under s.
23 of the Exchange Act which might result in a penalty under
s. 23(1)(a) or the case being sent to a Court for trial. He
says that as far as the enquiry under s. 23(1)(a) is
concerned, it is an enquiry in respect of art offence and no
further charge or complaint is necessary before undertaking
the enquiry. The contends that the protection under art.
20(3) extends not only to criminal trials, but also to
trials of all offences under the Exchange Act because for
the same offence one person may be convicted and penalty
levied under s. 23(1) (a) or convicted by a Court and
sentenced to imprisonment.
These aspects have not been considered by this Court in any
case which has been brought to our notice, but we do not
think that it is necessary to dispose of these contentions
because we are of the opinion that the second point raised
by Mr. A. K. Sen must prevail.
It is well settled that with the lodging of a first
information report a person is accused of an offence within
the meaning of art. 20(3). In M. P. Sharma v. Satish
Chandra(2) where search warrants were issued against persons
who had been included in the category of accused in the
first information report, Jagannadhadas, J., observed at p.
1088:
"Nor is there any reason to think that the
Protection in respect of the evidence so
procured is confined to what transpires at the
trial in the court room. The phrase used in
article 20(3) is "to be a witness’ and not to
"appear as a witness"-. It follows that the
protection afforded to an accused in so far as
it is related to the phrase "to be a witness"
is not merely in respect of testimonial
compulsion in the court room but may well
extend to compelled testimony previously
obtained from him. It is available therefore
to a person against whom a formal accusation
relating to the commission of an offence has
been levelled which in the normal course may
result in prosecution. Whether it is
available to other persons in other situations
does not call for decision in this case."
(1) [1969] 2 S.C.R. 461.
(2) [1954] S.C.R. 1077.
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446
In Raja Narayanlal Bansilal v. Maneck Phiroz Mistry (1) it
was observed :
"Similarly, for invoking the constitutional
right against testimonial compulsion
guaranteed under Art 20(3) it must appear that
a formal accusation has been made against the
party pleading the guarantee and that it
relates to the commission of an offence which
in the normal course may result in
prosecution."
In Romesh Chand Mehta v. State of West Bengal(2) Shah, J.,
after reviewing a number of authorities, observed at p. 472
:
"Normally a person stands in the character of
an ,accused when a First Information Report is
lodged against him in respect of an offence
before an Officer competent to Investigate it,
or when a complaint is made relating to the
commission of an offence before a Magistrate
competent to try or send to another Magistrate
for trial of the offence."
The Additional Solicitor General says that the petitioner
had not been specifically named as accused in the First
Information Report and, therefore, he is not entitled to the
protection under Art. 20(3). We are unable to agree with
him in this respect. The petitioner was the General Manager
of the United Commercial Bank and it was alleged in the
grounds of arrest that the petitioner was in charge of, or
was responsible to the United Commercial Bank Ltd. for the
conduct of the business of the said Bank, and that he failed
to prove in course of his statements made under S. 19F
before Shri D. K. Guha, Deputy Director of Enforcement, that
the contravention took place without his knowledge or that
he exercised all due diligence to prevent the aforesaid
contravention, as required under S. 23C of the Exchange Act.
In view of these allegations it is idle to contend that the
petitioner was not included in the expression "the
management and other officers of the United Commercial Bank
Ltd." We have already mentioned that in the First
Information Report it is the same forward Exchange Contract
which is the subject-matter of charge.
Although we held that the petitioner is a person accused of
an offence within the meaning of art. 20(3), the only
protection that art. 20(3) gives to him is that he cannot be
compelled to be a witness against himself. But this does
not mean that he need not give information regarding matters
which do not tend to incrimi-
(1) [1961] 1 S.C.R. 417 ; 438.
(1) [1969] 2 S.C.R. 461
447
nate him. This Court observed in State of Bombay V. Kathi
Kalu Oghad(1) as follows.:
"In order that a testimony by an accused
person may be said to have been self-
incriminatory the compulsion of which comes
within the, prohibition of the constitutional
provision, it- must be of such a character
that by itself it should have the tendency of
incriminating the accused, if not also of
actually doing so. In. other words, it should
be a statement which makes the case against
the accused person alteast probable,
considered by itself."
Therefore we are unable to set aside the summons. The peti-
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tioner must appear before the Deputy Director and answer
such questions as do not tend to incriminate him, as
explained by this Court.
The petition is accordingly allowed to the extent that it is
declared that the petitioner is a person accused of an
offence within art. 20(3).
The facts in Writ Petition No. 165 of 1972 are similar and
the same declaration is given.
S.C. Petition allowed.
(1) [1962] 3 S.C.R. 10 32.
448