1961 (11) TMI 2 - SC - Customs

Whether the Customs authorities are entitled to the custody of records seized by them under a search warrant issued under Section 172 of the Sea Customs Act, and the Magistrate cannot deny them the right to carry away the documents for their scrutiny? Whether the order of the Chief Presidency Magistrate gave inadequate facilities to the Customs authorities for inspection and scrutiny of the documents? Held that - We must discharge the order of the learned Judge that the documents be handed over to the Customs authorities. The Magistrate is right in keeping these documents in his immediate custody; but we must direct that due facilities for inspection should be afforded to the Customs authorities in the shape of a separate room and suitable furniture and time extended beyond the ordinary Court hours. Inspection should be carried on in the presence of a Court official, and adequate privacy for questioning witnesses etc., should be afforded to the Customs authorities, whenever they find it necessary. In our opinion, if these facilities are granted and we direct that they be granted a period of four months from the date of this order reaches the Magistrate should prove enough. We, therefore, set aside the order for the handing over the documents to the Customs authorities, and make a direction for the disposal of the records, as stated above. We may add that this order does not apply to the 63 documents, which the Customs authorities have already agreed to return to the party.

Summary

Issues Involved:
1. Entitlement of Customs authorities to the custody of records seized under a search warrant issued under Section 172 of the Sea Customs Act.
2. Adequacy of facilities provided by the Magistrate for the inspection and scrutiny of the seized documents.

Issue-wise Detailed Analysis:

1. Entitlement of Customs Authorities to Custody of Seized Records:
The primary legal question was whether the Customs authorities are entitled to retain custody of records seized under a search warrant issued under Section 172 of the Sea Customs Act. The Customs authorities argued that documents seized by them could be retained for performing their statutory duties, equating documents relating to contraband goods with the contraband goods themselves. They contended that once a Magistrate issues a warrant, his connection with the search ends, and the Customs authorities should dispose of the seized items independently.

The court noted a conflict of opinion in the Calcutta High Court on this issue. Section 172 of the Sea Customs Act states that a Magistrate may issue a search warrant for dutiable or prohibited goods or related documents, and such a warrant shall be executed similarly to a search warrant under the Criminal Procedure Code. The court examined previous judgments, including Debabrata Mookerjee, J.'s unreported case and Sinha, J.'s judgment in Calcutta Motor and Cycle Co. v. Collector of Customs, which suggested that seized goods or documents need not be produced before the Magistrate. However, Sen, J. dissented, asserting that the ultimate disposal of seized items must be under the Magistrate's order.

The Supreme Court held that the Magistrate has jurisdiction under both Section 172 of the Sea Customs Act and the Criminal Procedure Code. The Magistrate must ensure the warrant is not abused and may keep control of the seized items to prevent harassment. The court concluded that the Magistrate's order to keep the seized documents in his custody was correct, emphasizing the Magistrate's power to oversee the proper execution of his warrant.

2. Adequacy of Facilities for Inspection and Scrutiny:
The second issue concerned whether the facilities provided by the Magistrate for the inspection and scrutiny of the seized documents were adequate. The Customs authorities argued that the Magistrate's order placed real difficulties in their way of scrutinizing the documents effectively. They requested custody of the documents or, alternatively, a separate room for inspection in privacy and extended hours for inspection beyond court hours.

The Supreme Court acknowledged that while the Magistrate was legally correct in retaining control over the documents, his narrow view on inspection facilities was problematic. The court noted the need for collaboration between the Magistrate and Customs authorities to expedite the scrutiny process without frustrating the Customs authorities' legitimate duties.

The court directed that the Customs authorities be provided with a separate room, suitable furniture, and extended hours for inspection, ensuring adequate privacy for questioning witnesses and informers. This arrangement aimed to balance the Magistrate's control over the documents with the Customs authorities' need for proper inspection facilities.

Conclusion:
The Supreme Court set aside the High Court's order directing the handing over of documents to the Customs authorities. Instead, it affirmed the Magistrate's custody of the documents while mandating improved inspection facilities for the Customs authorities. The court allowed a period of four months for the Customs authorities to complete the inspection, ensuring a balance between legal oversight and administrative efficiency.