TMI Blog1975 (7) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... re seized. THE propriety of the search and the validity of the seizure are the subject-matters of challenge in this application under Article 226 of the Constitution. THE search was conducted by virtue of an authorisation issued by the respondent No. 1 Assistant Director, Enforcement Directorate, Ministry of Finance under Section 19-D of the Foreign Exchange Regulation Act, 1947. As a result of that search certain documents were seized. I am told that after the seizure, there was an adjudication proceeding under Section 19-E of the Foreign Exchange Regulation Act, 1947, and there was an appeal preferred which is pending before the Appellate Board. In this application two main grounds were urged. The first ground was that the issue of aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the authorisation. After denying the allegations made on behalf of the petitioner, he has craved leave to refer to the letter of the Reserve Bank of India dated 3rd January, 1966 to the Deputy Director, Enforcement Directorate and to the complaint filed by the City Trade and Industry Ltd., New York, against the petitioner company in the Supreme Court, New York. The copies of the aforesaid documents have been annexed to the said affidavit-in-opposition. He has further stated that limited examination of the seized documents had 'brought to light documents which appear to be useful or relevant and it appeared that the export of jute carpet backing cloth of the approximate value of 30 million U. S. Dollors or more were made by New Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in the offices of the petitioner New Central Jute Mills Co. Ltd. Sahu Jain Ltd. and Sahu Jain Services Ltd. and their Directors at No. 11, Clive Row, Calcutta, and as such he passed the order for search. The letter of complaint of the City Trade and Industry Ltd. against the petitioner was filed before the Supreme Court of the City of New York in September 1965. A copy of certain extract from the complaint of the City Trade and Industries Ltd. against the petitioner has been annexed to the affidavit in-opposition. The said extract reveals the allegations made by the City Trade and Industry Ltd. against the petitioner company. It is stated that the said City Trade and Industry Ltd. had to boar the expenses of one employee of the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not only necessary that he should have reason that the documents would be useful or relevant which are to be found, but information must be such that it must lead to the formation of belief that the documents are secreted. For the proposition that requirements of Section 19-D had been fulfilled in this case, counsel for the respondent No. 1 drew my attention to the observations of the Supreme Court in the case of R. S. Seth Gopikisan Agarwal v. R.N. Sen, Asstt. Collector of Customs, and the observations appearing at paragraphs 6 and 7 of the judgment as also in paragraph 9. The scope and effect of Section 19-D and the extent to which materials can be scrutinised by the Court were exhaustively dealt with in the judgment delivered by Arun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey could be used to corroborate the officer's contention that he had the requisite reason to believe. In this case, apart from the two documents, one Of September 1965 and another of June 1966, in which certain allegations had been made by City Trade and Industries Ltd. regarding transactions they had with the New Central Jute Mills Co. Ltd., there is no further document or materials indicated in the affidavit filed on behalf of the respondent. It may also be mentioned that the said allegations of the City Trade and Industries Ltd., as it appears, were not unknown to the respondent. The Reserve Bank authorities were kept informed about the said complaint. The complaint made by City Trade and Industries Ltd. was ultimately dismissed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion counsel for the respondents drew my attention to the observations of the Supreme Court in the case of R. S. Seth Gopikisan Agarwal v. R.N. Sen, Assistant Collector of Customs and Central Excise, Raipur, and the observations of the Court appearing at paragraph 9. Reliance was also placed on the observations of the Supreme Court in the case of Radha Kishan v. State of Uttar Pradesh, in aid of the proposition that even if search was invalid, seizure was good, Such a proposition by itself in my opinion is not correct. What is meant by is that the materials gathered by search can certainly be utilised even though search was illegal. In this case I am not concerned with the validity of the adjudication proceedings consequent upon the search ..... X X X X Extracts X X X X X X X X Extracts X X X X
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