1964 (4) TMI 143 - SC - Indian Laws

Summary

Issues Involved:
1. Jurisdiction of the Magistrate over the disposal of documents seized under a search warrant issued under Section 19(3) of the Foreign Exchange Regulation Act, 1947.
2. Applicability of the provisions of the Code of Criminal Procedure to searches conducted under Section 19(3) of the Foreign Exchange Regulation Act, 1947.
3. Retention period of documents seized under Section 19(3) of the Foreign Exchange Regulation Act, 1947, as per Section 19-A.
4. Authority to extend the retention period of seized documents beyond the statutory period.
5. Correctness of the High Court's order directing the return of documents to the respondent.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Magistrate Over the Disposal of Documents Seized:
The Court examined whether the Magistrate issuing the search warrant has control over the disposal of the articles seized in execution of the warrant. It was concluded that the provisions of the Code relating to searches apply to search warrants issued under sub-section (3) of Section 19, but only in so far as they are applicable. The Court stated, "What is to be done with the articles seized does not strictly come within the expression 'searches'. It is dealt with in s. 19-A." Thus, the Magistrate does not have jurisdiction over the disposal of the documents seized under Section 19(3) of the Act.

2. Applicability of the Provisions of the Code of Criminal Procedure:
The Court clarified that the provisions of Sections 96, 98, and Form 8 of Schedule V of the Code do not operate in connection with searches under sub-section (3) of Section 19. Only the provisions relating to the conduct of searches, specifically Sections 101, 102, and 103 of the Code, apply. The Court stated, "It is therefore not correct for the appellant to say that the Magistrate can exercise his power under the Code in connection with property seized under sub-s. (3) of s. 19 of the Act."

3. Retention Period of Documents Seized:
Section 19-A authorizes the Director of Enforcement to retain a document for a period not exceeding four months, or if proceedings under Section 23 have commenced before the expiry of the four months, until the disposal of those proceedings. The Court noted, "In the present case such proceedings had not been commenced within the period of 4 months of the Director of Enforcement getting possession of the documents."

4. Authority to Extend the Retention Period:
The Court held that the Magistrate has no authority to permit the retention of documents by the Director of Enforcement beyond the statutory period specified in Section 19-A. The Court stated, "The Magistrate has no jurisdiction over the articles seized in execution of the search warrant issued under s. 19(3) of the Act and that he cannot permit the retention of such documents by the Director of Enforcement after the expiry of the period he is entitled to keep them in accordance with the provisions of s. 19-A."

5. Correctness of the High Court's Order:
The Court addressed whether the High Court's order directing the return of the two documents to the respondent was correct. The Court concluded that the order of the High Court was unjustified in the special circumstances of the case, considering that the Director of Enforcement had started proceedings under Section 23 before the order for the return of the documents. The Court stated, "The order of the High Court directing the return of the documents to the respondent therefore appears to us to be unjustified in the special circumstances of the case."

Conclusion:
The appeal was allowed, the order of the High Court was set aside, and it was ordered that the documents mentioned at items Nos. 2 and 7 of the Seizure Memo can be retained by the Director of Enforcement till the final conclusion of the proceedings commenced under Section 23 of the Act. The Court emphasized that the Magistrate has no jurisdiction over the articles seized under Section 19(3) of the Act and cannot permit their retention beyond the statutory period specified in Section 19-A.