LIMITED LIABILITY PARTNERSHIP-PART-XXIV - (Seizure of Documents during Investigation)

[Dr. Sanjiv Agarwal]

Seizure of Documents by Inspector (Section 48)

Section 48 of LLP Act, 2008 empowers the inspector appointed by the Central Government under this Act, to investigate the affairs of an LLP, to enter the place where books and papers are kept, search and seize the documents or books and papers relating to LLP, after seeking permission from the Judicial Magistrate of the First Class or Metropolitan Magistrate in this regard, if he has reasonable cause that the partner of such LLP or other entity may destroy, mutilate, alter, falsify or secret the documents. The section also seeks to empower inspector to keep such books and papers in his custody for a period not exceeding six months for investigation and return the same, after needful is done, to the concerned entity or person and inform the Magistrate of such return.

The provisions of section 48 provide powers to the inspector to search and seize the books and papers etc during the course of inspection after obtaining an order for seizure from first class judicial magistrate or metropolitan magistrate.

This power of search and seizure shall be subject to the provisions of the Code of Criminal Procedure, 1973 relating to search or seizure under the Code.

Seizure of the Books by Inspector [Sub-section (1)]

Under sub-section (1), If the inspector has reasonable ground to believe that the books and papers may be destroyed, mutilated, altered, falsified or secreted, the inspector may make an application to the Judicial Magistrate of the First Class or the Metropolitan Magistrate for an order for the seizure of the books and papers.

The first class judicial magistrate or metropolitan magistrate shall order for seizure of documents only on the application made to him by the inspector investigating the LLP or entity and not otherwise. Thus, magistrate can not make a suo moto order for search. The issuance of order has to be based upon-

(a) existence of reasonable ground to believe that the books and papers may be destroyed or mutilated or altered or falsified or secreted to some other place, and

(b) based on such reasonable ground to believe, order is based on the application by the inspector seeking order for search.

(c) consideration of application and hearing of the inspector, if necessary.

The search order can be obtained for documents of any one or more of the following -

a) LLP

b) Other entities

c) Partners of LLP

d) Designated partners LLLP

Authorization of Seizure by Magistrate [Sub-section (2)]

According to sub section (2), the magistrate shall consider the application made by the inspector any if required, shall also offer an opportunity of being heard, if it is necessary for consideration of application.

After consideration of the application, the magistrate may authorize the inspector-

(i) to enter the place or places where the books and papers are kept

(ii) to search the places.

(iii) to seize books and papers which the inspector consider necessary (sub section 2)

The order of the magistrate may authorize the inspector to -

(a) enter the premises where such books and papers are kept.

(b) take assistance, if and as may be required to enter the premises.

(c) search the premises, as per order

(d) seize books and papers considered necessary by inspector for the purpose of investigation.

These place or places could be of LLP, other entities, partners or designated partners including offices and residences.

The magistrate after considering the application and hearing the inspector, may by order authorize the inspector to take the action as specified in clause (a) to (c ) in sub section (2). However, the order passed by the Magistrate is open to judicial review under Article 226 of the Constitution: Indian Express (Madurai) Pvt. Ltd v Chief Presidency Magistrate (1974) 44 Comp. Cas 106 (Mad).

Retention of Books and Papers by Inspector [Sub-Section (3)]

Sub section (3) talks about retention of books and papers. The inspector may keep the books and papers seized till the conclusion of his investigation. He should return the books and papers to the person from whose custody or power they were seized and inform the Magistrate of such return. Before returning the books and papers, the inspector may place identification marks on them.

The inspector is required to have custody of books and papers seized till these are returned back to the concerned entity or person from whose custody or power they were seized. These have to be returned to the same entity or person, as the case may be.

The inspector can have the custody of books and papers seized, subject to the following-

(a) retain books for such period as he considers necessary subject to (b) and (c ) below.

(b) seized documents can not be retained beyond the conclusion of the investigation.

(c) seized documents can not be retained for a continuous period of more than six months.

It is also important to note that only books and papers can be seized and no other article or goods or currency is allowed to be seized under section 48 of the LLP Act.

Applicability of CPC [Sub-section (4)]

Subject to provisions of section 48, sub-section (4) provides that the search and seizure under this section shall be carried out in accordance with the provisions of the Code of Criminal Procedure, 1973.

The following provisions of Criminal Procedure Code, 1973 govern the search and seizure under the Code:

Section 100 Persons in charge of closed place to allow search

Section 101 Disposal of things found in search beyond jurisdiction.

Section 102 Power of police officer to seize certain property.

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