TMI Blog1986 (6) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner, Bishnu Krishna Shrestha, was not available in Calcutta and had not signed the petition or affirmed the affidavit. In fact, it was alleged that Sri Bishnu Krishna Shrestha was absconding and the writ petition was entirely unauthorised. On behalf of the writ petitioner, an assurance was given that the petitioner will be personally present in court on the next date of hearing. The petitioner was afraid that he would be arrested as soon as he came to the court. On behalf of the respondents, as assurance was also given that there was no intention of arresting the petitioner. It was stated that the respondents only wanted to search the flat. The statements made by the advocates appearing for the petitioner and the respondents were, however, not recorded. On April 17, 1986, the matter again appeared in the list. The interim order dated April 10, 1986, was vacated and a direction was given for the matter to appear on the list on April 21, 1986. The petitioner personally appeared in the court. On April 18, 1986, on behalf of the petitioner, it was mentioned in court at about 12.30 p.m. that the petitioner had been taken to the office of the Foreign Exchange Department on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... airs in the presence of his employees. The employees could not be asked to vacate the flat or to go to some other part of the flat. It is equally astonishing to hear that merely because the petitioner wanted to spend the night in the office of the Foreign Exchange Department, he was allowed to spend the night there. It is amazing that the Foreign Exchange Department allows strangers to spend nights in their office where their records and other important documents are kept. There is no explanation why the petitioner was not allowed to leave the office premises till about 12.30 p.m. on the 18th and after the matter was mentioned in court. It also appears that an undertaking was obtained from the petitioner by the respondents before he was allowed to leave the office premises. If the petitioner had gone and stayed in the office of the Foreign Exchange Department voluntarily, why was this undertaking necessary ? What has been narrated above illustrates the high-handed manner in which the entire operation of search and seizure has been carried out in this case. The petitioner has stated in the writ petition that he was born in Jobbani, in the District of Purnia, in the State of Bihar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner requiring the petitioner to furnish certain information and documents. The letter was wrongly addressed. But the petitioner has stated that he ultimately received that letter and sent a reply to that letter. The petitioner was required to furnish information as to his full name, present and permanent address, nationality, occupation, nature of business carried on by his company, Sikkim Tobacco Company, Gangtok, particulars of passport, if any, held by the petitioner, period of stay in India, particulars of his visits abroad, details of the immovable property held by him in and outside India, whether any permission of the Reserve Bank of India had been obtained by him for acquiring/holding immovable properties in and outside India and name and address of his bankers in and outside India. The petitioner in his reply dated July 15, 1985, informed the respondents about his correct address in Calcutta and requested that all communications be sent to that address. The petitioner wanted 15 days' time to give all the requisite information. The petitioner, however, requested the respondents to inform him why was it necessary to obtain this information. No reply to that letter was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rator, the business rivals of the petitioner wanted to embarrass the petitioner and for that purpose gave false information about the petitioner maliciously. The petitioner stated that his apprehension was that the enquiry had been started on the basis of complaints lodged by G.T.C. with ulterior motives for the purpose of gaining control of a cigarette manufacturing company. The enquiry at this stage by the Enforcement Branch could only prejudice the petitioner's case that is now pending and it will be very difficult for the petitioner to appear in the case before the arbitrator and also to appear in the enquiry proceedings initiated by the Enforcement Branch. It has been alleged that Government machinery is being utilised with ulterior motives to benefit particular group of businessmen. An affidavit has been filed by Kalyan Kumar Majumdar, the Investigating Officer of the Enforcement Branch, in which he has stated " I being the Competent Officer under the, Foreign Exchange Regulation Act, 1973, having reasons to believe that certain documents including Indian currency, foreign exchange and books of account which, in my opinion, will be useful for, or relevant to, the invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the investigation is going on. The petitioner's repeated requests in this regard have gone unanswered. It has been argued that the respondents cannot, in law, compel a man to answer any number of questions without disclosing the purpose for which the investigation is going on. Otherwise, any citizen of India can be picked up at any time and subjected to interrogation. A person is entitled to know why he is being subjected to interrogation before he answers the questions put to him. Although the question that has been raised is of importance, in the facts of this case, it is not necessary to go into that question. The petitioner ultimately answered the questions that were sent to him even though the respondents did not disclose the purpose for which the enquiries were being made. It has next been argued that search and seizure proceedings can only be conducted on the basis of a valid warrant and strictly in terms of the provisions of section 37 of the Foreign Exchange Regulation Act. Section 37(1) and section 37(2) provide "37. Power to search Premises.-(1) If any officer of Enforcement, not below the rank of an Assistant Director of Enforcement, has reason to believe that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cutta-17. It appears that the search warrant was issued on March 11, 1986, and kept in readiness. The warrant was not executed for nearly a month. Section 37 of the Foreign Exchange Regulation Act has conferred powers upon some officers specified under the Act to enter and search any premises provided they have reason to believe that documents which will be useful for, or relevant to, a pending investigation are secreted in a place where the search is proposed to be made. The belief must be of the officer who has been given the power under the statute to conduct or authorise search and seizure proceedings. This power cannot be exercised mechanically merely because a direction has come from a superior officer to investigate into some allegations against the petitioner. The records that were produced in court did riot go to show that the Government of India had given any direction to carry out a search and seizure proceeding in the business premises and the residence of the petitioner. Merely because the respondents were directed to make some investigation about the nationality of the petitioner, they cannot immediately start a search and seizure proceeding. Search of a person' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reflections of dirigisme and of heavy taxation, others of changes in mores. Examples of them are to be found in the Exchange Control Act, 1947, the Finance Act, 1972 (in relation to value added tax) and in statutes about gaining or the use of drugs. A formidable number of officials now have powers to enter people's premises and to take property away, and these powers are frequently exercised, sometimes on a large scale. Many people, as well as the respondents, think that this process has gone too far ; that is an issue to be debated in Parliament and in the press. The courts have the duty to supervise, I would say critically, even jealously, the legality of any purported exercise of these powers. They are the guardians of the citizens' right to privacy. But they must do this in the context of the times, i. e., of increasing Parliamentary intervention, and of the modern power of judicial review. " Lord Wilberforce after prefacing his judgment in the above manner went on to state that Parliament had introduced substantial safeguards to protect the rights of the citizens. It was observed (p. 82 of I All ER): " (1) No action can be taken under section 20C without the approval ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether the officer concerned is acting on any information or not cannot be tested by an independent body before the action is taken. Lord Wilberforce observed that it would be wrong to assume that a Circuit judge would simply act as a rubber stamp on the Revenue's application. But under the Foreign Exchange Regulation Act, no sanction or warrant is, required to be taken from an independent judicial authority before search and seizure is conducted. Unlike the English Statute, it is not necessary to obtain the approval of two independent members of the Board of Revenue acting personally before a warrant is issued. The only thing that is similar is the phraseology " has reason to believe " which as Lord Wilberforce observed must be taken to accept the restraints which courts in many cases have held to be inherent in them. Lord Wilberforce in the case of Rossminster Ltd. [1979] 52 TC 160 [1980] 1 All ER 80, observed (p. 84 of 1 All ER); " Like all statutory powers conferred on executive officers, it is subject to supervision by the courts exercising their classic and traditional powers of judicial review. It is undisputed that the words 'has reasonable cause to believe' are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of facts and information in the possession of the officer concerned at the time the search warrant is issued. The result of the search and seizure proceeding is quite immaterial for the purpose of deciding whether the warrant was issued lawfully or not. In a case where there were good reasons for initiating search and seizure proceedings, the fact that nothing came out of the search and seizure proceedings will not vitiate the issue of a search warrant. But in a case where there was no justification for issuing search warrant, the fact that incriminating documents were discovered as a result of the search will not lend validity or justification to the search and seizure proceeding which was even at its inception unlawful. In this case, the recorded reasons were not produced in court. A file containing certain documents was produced. My attention was specially invited to a direction given by an official of the Home Ministry to make an investigation about the nationality of the petitioner. That apart, nothing has been shown on the basis of which the officer concerned claimed to have reason to believe that documents that might be useful for the investigation were secre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which reliance was placed by the Department were given to the court. In this case, the respondents declined to give such copies. After examining the documents that were produced in the court, I am of the view that there was no ground for the formation of the belief that any documents which would be useful for the search were kept secreted in the home or office of the petitioner. The search was really of a fishing nature. The respondents conducted the search hoping to find some incriminatory documents. The search, in my opinion, was quite contrary to the provisions of section 37 of the Foreign Exchange Regulation Act and must be held to be unlawful. It is not necessary to refer to the large number of cases that were cited to show the extent to which the court could examine the material in the possession of the officer concerned on the basis of which the search and seizure were commenced. It is not necessary to refer to all these cases. The expression " reason to believe " can be found in a number of statutes and has been interpreted by the courts in a large number of cases. Some of these judgments were referred to by Desai J. in the case of Dr. Partap Singh v. Director of E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer of the Enforcement as may be specified. The notification was issued on January 1, 1974, to the following effect : `Ministry of Finance (Department of Economic Affairs) Order No. F. 1/72/EC/73-3, dated January 1, 1974. G.S.R. No. 62.-In exercise of the powers conferred by section 5 of the Foreign Exchange Regulation Act, 1973 (46 of 1973), and in supersession of the Order of the Government of India in the Cabinet Secretariat (Department of Personnel and Administrative Reforms) No. P. 9/1/73AVD. IV(i) dated June 7, 1973, the Central Government hereby authorises every Investigating Officer and every Inspecting Officer employed in the Special Unit of the Enforcement Directorate at Calcutta, to exercise all the powers and discharge all the duties (a) of an officer of Enforcement under sections 34, 35, 36, 38, 39, 40 and 41 of the said Act; (b) of a Chief Enforcement Officer under sub-section (2) of section 33 of the said Act; and (c) of an Assistant Director of Enforcement under sections 37 and 44 of the said Act." It was argued that the power to conduct or authorise search and seizure is not limited to even a high officer of the Department. Every Investigating Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s is a course which a court of law should not encourage. It is very much in the public interest that anyone who commits an economic offence should be brought to justice. It is equally important that individual liberty should be protected by the judges who have the duty to protect individuals from abuse of power by the executive. It is unlawful for an officer of the State as much for a private person to break into somebody's home or office without his consent and search for and seize any documents. The officers of the State under various Acts have been empowered with the right, in public interest, to search for and seize documents and other materials in connection with investigation within certain safeguards. If the safeguards were not there, the unfettered power might have been struck down as unconstitutional. If the owner is exercised in disregard of the safeguards, it must be held that the power has been exercised unlawfully. If it is established that a man has suffered from unlawful action of a Government Officer, then it is the duty of the court to redress the damage suffered by a citizen. Status quo ante must be restored and this can only be done by the return of the docume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its own laws, or worse, its disregard of the charter of its own existence ". The observation of Mr. Justice Brandies in the case of Olmstead v. United States [1927] 277 US 438, was quoted with approval: " Our Government is the potent, the omnipresent teacher. For good or for ill, it teaches the whole people by its example ...... If the Government becomes a law-breaker, it breeds contempt for law ; it invites every man to become a law unto himself; it invites anarchy." In the case of Mapp v. Ohio [1961] 367 US 643, it was categorically held by the Supreme Court of the USA that all evidence obtained by searches and seizures in violation of law is inadmissible in a State court. This decision was reached on the basis of three principles. Firstly, it was held that the Fourth Amendment guaranteed the right of the people against unreasonable searches and seizures. The constitutional assurance against unreasonable searches and seizures would be merely " a form of words ", valueless and undeserving of mention if the Government could use evidence obtained by unconstitutional search and seizure in a Federal Court. It was also held that to allow the evidence obtained by an unlawful s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Mapp v. Ohio [1961] 367 US 643, that if documents are unlawfully seized from a man's residence and used in evidence against him, this will amount to user of coerced evidence. On behalf of the respondents, it has been argued that if a document is relevant for the purpose of this case, it cannot be excluded from evidence. Therefore, irrespective of the source from which the documents have been gathered or the method by which the documents have been obtained, the State has a right to retain these documents if it is relevant for the purpose of the enquiry that was being conducted. The enquiry is in respect of some allegations of violation of the Foreign Exchange Regulation Act and in that enquiry, the seized documents would be relevant. If this argument is to be accepted, it will have to be held that a person has no remedy against unlawful entry and search of his residence by a government official. If the unlawful entry and search enable a government officer to find some material which will be useful for some investigation, that official will be entitled to retain it. If the unlawful search does not yield any useful material for the purpose of investigation, the matter will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icriminal proceeding. Mr. Das has, however, argued that whatever may be the view taken by the English or the American courts, the Supreme Court in India has held in a number of cases that documents seized in the course of illegal search and seizure proceedings can be retained by the Government if the documents would be relevant or useful in connection with any pending proceeding. In support of his contention, Mr. Das invited my attention to several judgments of the Supreme Court. I shall now refer to those judgments. In the case of Radha Kishan v. State of U.P., AIR 1963 SC 822 [1963] 1 Cri LJ 809, the appellant was a postman. Certain undelivered postal articles were recovered from an almirah in his house. Radha Kishan was tried and convicted of an offence under section 52 of the Post Office Act, for secreting postal articles. One of the contentions raised on behalf of the appellant was that the search and seizure were illegal. Mudholkar J., speaking for the court, repelled this contention and held that even assuming that the search was illegal, the seizure of the articles was not vitiated. Because of the illegality of the search, the court may be inclined to examine carefull ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be conveyed orally by informants. " It was further held that the expression " reason to believe " was not synonymous with the subjective satisfaction of the officers. The belief must be held in good faith. It cannot merely be a pretence. It is up to the court to examine the question whether the reasons for the belief had a rational connection with or a relevant bearing on the formation of the belief and were not extraneous or irrelevant for the purpose of the section. In Partap Singh's case [1985] 58 Comp Cas 477 (SC), the file containing the records of the case on the basis of which the search was conducted was produced before the court and Desai J. observed (p. 483): "The officer issuing the search warrant had material which he rightly claimed to be adequate for forming a reasonable belief to issue the search warrant." Desai J. went on to observe at page 994 (of AIR); (at p. 829 of Cri. Li) of the report (p. 485 of 58 Comp Cas): 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 or fictitious or mala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he residential accommodation of the writ petitioner was bad, had not been challenged before the Supreme Court. it was observed by Wanchoo C.J., at page 67 of the report (p. 469 of 20 STC): " It follows, therefore, that anything recovered from the search of the residential accommodation on the basis of this defective warrant must be returned. It also follows that anything confiscated must also be returned, as we have held that sub-section (4) must fall. As to the accounts, etc., said to have been seized, it appears to us that the safeguards provided under section 165 of the Code of Criminal Procedure do not appear to have been followed when the search was made for the simple reason that everybody thought that that provision was not applicable to a search under sub-section (2). Therefore, as the safeguards provided in section 165 of the Code of Criminal Procedure were not followed, anything recovered on a defective search of this kind must be returned." Mr. Kapoor argued that this case was decided by a Bench of five judges and, therefore, if the conflicting judgments of the Supreme Court could not be reconciled, the decision of the larger Bench must be followed. In support o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er or an Inspector of Revenue Department or a Sub-Inspector of Police Department were not officers of proper status to make searches. The Supreme Court also rejected the contention that no safeguard had been provided for search and seizure proceedings and, therefore, these provisions were unconstitutional in that arbitrary powers were conferred upon the State to make search and seizure. The Supreme Court pointed out that section 41(2) itself did not provide any Safeguard but there was a provision in the proviso to sub-section (2) which laid down "all searches under this sub-section shall, so far as may be, be made in accordance with the provisions of the Code of Criminal Procedure, 1898 The Supreme Court held at page 66 of the report (p. 467 of 20 STC): " The proviso clearly lays down that all searches made under this subsection, so far as may be, shall be made in accordance with the provisions of the Code of Criminal Procedure. Thus, all the provisions contained in the Code of Criminal Procedure relating to searches would be applicable to searches under sub-section (2) so far as may be. Some of these provisions are contained in Chapter VII but one such provision is contained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the grounds for having reason to believe are under challenge, that challenge can be repelled either by stating the reasons in the affidavit or by producing the recorded reasons in court, neither of which was done in this case. The documents produced in court merely contain directions to make enquiry. Moreover, it appears that a warrant was issued long before the search was made. The search warrant was issued as early as on March I 1, 1986, and the search was sought to be made on April 7, 1986, by the officers of the Enforcement Directorate. No reason has been given to explain this delay. In fact, this confirms the allegation that there was really no reason for the search. The respondents armed themselves with a search warrant without any reason and waited for nearly a month before deciding to conduct a search because they were unable to find any material in support of the allegation that the petitioner was not an Indian citizen. Having failed to find any material or evidence to show that the petitioner was not an Indian citizen, the respondents decided to search the office and the residence of the petitioner to find out if any material could be unearthed in support of their c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been committed against the petitioner, why should not that be undone by passing an appropriate order. In the case of Commissioner of Commercial Taxes v. Ramkishan Shrikishan Jhaver [1967] 20 STC 453 (SC); AIR 1968 SC 59, this was precisely what was done by the Supreme Court. The documents that were unlawfully seized were directed to be returned to the petitioner in that case. I see no reason why such an order should not be passed in the instant case. The argument that the relevant documents could not be excluded from evidence even though they were unlawfully seized also cannot be sustained in this case for several reasons. There is no case pending against the petitioner. The petitioner has not been informed of any charge or allegation. In fact, the petitioner has not been charged with any offence. The question of the document being relevant as evidence in criminal or quasi-criminal case has not arisen as yet in this case. Moreover, the Government Officers cannot be permitted to break the law in the name of law enforcement. If a person is charged with a crime, it must be established in accordance with law. The entire procedure adopted by the State must be lawful. Otherwise, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court to express any opinion on this issue. Therefore, I have no hesitation in this case in following the decision given by five judges of the Supreme Court in the case of Commissioner of Commercial Taxes, Board of Revenue v. Ramkishan Shrikishan Jhaver [1967] 20 STC 453 (SC); AIR 1968 SC 59, and hold that the documents which were illegally seized in the course of the search and seizure proceedings which were initiated unlawfully must be returned to the petitioner. There is also another aspect of the case. Justice Mudholkar, speaking for the court, in the case of Radha Kishan v. State of U.P., AIR 1963 SC 822 ; [1963] 1 Cri LJ 809, expressed the opinion that there were two safeguards against a search in contravention of the statute. The court would be inclined to examine carefully the evidence seized in the course of illegal search. Another remedy indicated in that judgment was that the search could be resisted by the persons whose premises were sought to be searched. In this case, the petitioner resisted the search that was proposed to be made. In fact, he rushed to the court at the very outset. An order of injunction was passed which was later on vacated and the search wa ..... 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