2004 (11) TMI 569 - SC - Indian Laws

Whether section 73 of the Indian Stamp Act 1899 as incorporated by Andhra Pradesh Act No. 17 of 1986 by amending the Central Act in its application to the State as struck down by the High Court of Andhra Pradesh is ultra vires the provisions of the Indian Stamp Act as also of Article 14 of the Constitution? Whether disclosure of the contents of the documents by the Bank would amount to a breach of confidentiality and would therefore be violative of privacy rights of its customers?

Issues Involved:
1. Constitutionality of Section 73 of the Indian Stamp Act, 1899 as amended by Andhra Pradesh Act No. 17 of 1986.
2. Violation of Article 14 of the Constitution.
3. Inconsistency with other provisions of the Indian Stamp Act.
4. Violation of principles of natural justice.
5. Excessive delegation of powers.
6. Right to privacy and unreasonable search and seizure.

Issue-wise Detailed Analysis:

1. Constitutionality of Section 73 of the Indian Stamp Act, 1899 as amended by Andhra Pradesh Act No. 17 of 1986:
The Supreme Court examined the constitutionality of Section 73 as amended by Andhra Pradesh Act No. 17 of 1986. The amendment empowered any person authorized by the Collector to inspect, seize, and impound documents in private custody without predefined guidelines or reasonable cause. The Court found this provision to be unconstitutional as it violated the fundamental principles of privacy and reasonable search and seizure.

2. Violation of Article 14 of the Constitution:
The High Court had declared the amended Section 73 as ultra vires Article 14 of the Constitution, which guarantees equality before the law. The Supreme Court upheld this view, stating that the provision was arbitrary and unreasonable, as it allowed for the inspection and seizure of documents without any guidelines or reasonable cause, leading to potential misuse and discrimination.

3. Inconsistency with other provisions of the Indian Stamp Act:
The amended Section 73 was found to be inconsistent with other provisions of the Indian Stamp Act. The original Section 73 allowed inspection of documents only in the custody of public officers and for specific purposes related to securing duty or discovering fraud. The amendment extended this power to documents in private custody without similar safeguards, creating a conflict within the Act.

4. Violation of principles of natural justice:
The Supreme Court agreed with the High Court's finding that the amended Section 73 violated principles of natural justice. The provision allowed for the seizure and impounding of documents without prior notice or an opportunity for the affected parties to be heard, except in the case of banks, where a 30-day notice was required. This lack of procedural fairness rendered the provision unjust.

5. Excessive delegation of powers:
The amended Section 73 permitted the Collector to authorize "any person" to inspect and seize documents, without specifying the qualifications or rank of such persons. The Supreme Court held that this amounted to excessive delegation of powers, as it lacked clear guidelines and safeguards, leading to potential abuse of authority.

6. Right to privacy and unreasonable search and seizure:
The Supreme Court extensively discussed the right to privacy in the context of search and seizure. It referred to various international and national precedents, emphasizing that privacy rights are fundamental and must be protected against arbitrary state intrusion. The Court held that the amended Section 73 violated the right to privacy, as it allowed for unreasonable searches and seizures without probable cause or reasonable basis, thereby infringing on personal liberty under Article 21 of the Constitution.

Conclusion:
The Supreme Court concluded that Section 73 of the Indian Stamp Act, as amended by Andhra Pradesh Act No. 17 of 1986, was ultra vires the Constitution. The provision was found to be arbitrary, unreasonable, and violative of the principles of natural justice, right to privacy, and equality before the law. Consequently, all appeals were dismissed, and the judgment of the High Court was upheld.

← Previous Next →