Full Judgment Text
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PETITIONER:
DR. PARTAP SINGH AND ANR.
Vs.
RESPONDENT:
DIRECTOR OF ENFORCEMENT FOREIGN EXCHANGE REGULATION AND ORS.
DATE OF JUDGMENT26/04/1985
BENCH:
DESAI, D.A.
BENCH:
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
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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
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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]
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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 eeen made to cook-up a wholly imaginary
allegation for attributing personal mala fides to the sixth
respondent. In the circumstances the allegation cannot
stand.
JUDGMENT:
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
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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
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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.
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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.
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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
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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
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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
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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
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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.
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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
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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
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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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