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TMI Blog1964 (11) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... . The first respondents is the deputy Collector of Customs, Vizag, Respondents 2 and 3 are preventive officers of the Customs Department, Vizag. 3. The petitioner has extensive business in the territories of Union of India including export trade of manganese ore to overseas buyers from Viskhapatnam Port. On 24-901963, the first respondent issued a warrant No. 9/63 to the third respondent which runs as follows:- Section 105 of the Customs (Preventive) Act whereas I have reason to believe that goods liable to confiscation, documents and things, which, in my opinion, are useful for or relevant to proceedings under Customs Act, 1962 (52 of 1962) are secreted at premises No. Eagles Next opposite to Government Circuit House, Uplands. Therefore, in exercise of the powers conferred upon me under S. 105(1) of the Customs Act 1962 (52 of 1962), I authorise and require you to search for the said goods, documents and things in the aforesaid premises and if found to produce the same forthwith before me and return this warrant to the Collector of Customs, Madras, with endorsement certifying what you have done under it, immediately upon its execution. He issued a similar warrant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt had to believe; (iv) there is no mention as to what are the goods liable to confiscation; (v) there is no mention of any specific offences under the Customs Act or under any Act; (vi) the search was all-embracing. (b) Following defects in connection with the conducting of search and taking into custody of articles which resulted in non-compliance with the provisions of S. 105(2), Customs Act and S. 165(5), Cr. P.C. :- (vii) the provisions of S. 165(5), Cr. P. C. were not followed and no report was sent as required by those provisions; (viii) no order of seizure was passed; (ix) articles which could not be lawfully covered by the warrants were taken into custody; (x) search officer entered in warrant No. 10 names which had not been entered by Warrant Officer. (3) If S. 105, on a correct interpretation, is such that the warrant Nos. 9 and 10 comply with the requirements of S. 105, then that S. 105 is ultra vires as (a) authorising unjustifiable interference with the civil liberties of the petitioner as a citizen, and (b) violative of Art. 14 of the Constitution. (4) In view of the words any proceeding under this Act in S. 105 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of those documents indicated that the said Durga Prasad had resorted to dealings constituting breaches of the Customs Regulations and the Regulations under the Foreign Exchange Regulation Act on a large scale. In this context were found entries referring to petitioner Gopikisan Agarwal (petitioner in S. C. A No. 459) indicating that this petitioner had definite and direct interest of a dubious nature with the petitioner in the other petitions in the above dealings constituting breaches of the customs regulations and regulations under the Foreign Exchange Regulations Act. In view of these circumstances, it was considered necessary premises of the petitioner and his close associates for seizing documents which could be relevant to any proceeding under the Act and also for recovering any undeclared gold actionable under the Gold Control Rules kept in those premises. The warrant issued in S. C. A. 459/1963 was only under S. 105 of the Customs Act (read with S. 98 of the Crl. P. C.). The warrants issued in the other cases, that is, S. C. A. 437,438,449 and 490 of 1963 were under rule 126-A (2) of the Defence of India Rules also. In the counters (Returns) filed in those cases fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing goods brought from a place outside India shall be liable to confiscation.................. Section 160(1). The enactments specified in this schedule are hereby repealed to the extent mentioned in the fourth column thereof...................................................................................................... (4) This Act shall apply to all goods which are subject to the control of customs at the commencement of this Act notwithstanding that the good were imported before such commencement................................. THE SCHEDULE Year. No. Short title Extent of Repeal. 1878 8 The Sea Customs Act The whole 14. For purposes of convenience in discussion and avoiding cumbrous language, we are using words in this judgment as follows:- We refer to the officer who issued the warrants or is competent to issue the warrants under S. 105 of the Act as We refer to the officer who issued the warrants or is competent to issue the warrants under S. 105 of the Act as Warrant Officer , the person in whose favour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n hampered, by mere implication from the language used in statute, unless as Fry, J., said in Mayor, etc., of Yarmouth v. Simmons (1878) 10 Ch. D. 518 527, the legislature clearly and distinctly authorise the doing of something which is physically inconsistent with the continuance of an existing right. (3) In order to take away a right, it is not sufficient to show that the thing sanctioned by the Act, if done, of sheer physical necessity, put an end to the right; it must also be shown that the Legislature have authorised the thing to be done at all events, and irrespective of its possible interference with existing rights: Western Counties Ry. v. Windsor, etc., Ry. (1882) 7 Application Cas 178 . 17. In Empress Mills, Nagpur v. Municipal Committee, Wardha, [1958] 1 SCR 1102 , it was observed regarding the wording of certain provisions of the C.P. and Berar Municipalities Act (Act 2 of 1922) relating to imposition of certain tax as follows:-(at p. 344): The efficacy of the relative contentions of the parties, therefore, requires the determination of the construction to be placed on the really important words of which are terminal tax , imported into or exported from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of interpretation in other ways should be given a stained construction or should be added to by words which are not there, so as to give an interpretation in favour of the petitioner while a plain reading of clear words of statute indicates an obvious meaning without any doubt and does not yield to or give scope for any such interpretation. We find that the words of S. 105 of the Act are clear and not equivocal and that the sentences are not ambiguous and do not leave any doubt of their meaning. 20. Principle No. 2 is a paramount rule and prevails over principle No. 1. In later portions of this judgment, we are discussing the important provisions of the Act and from that discussion as well as the object, purpose and policy of the Act, it will be clear that only if S. 105 is interpreted according to its plain language and the intention is gathered from that plain language, all the cases within the mischief's aimed at would fall within the remedial influence of S. 105 read with other sections. IT is also clear from that discussion that the power given and action sanctioned by S. 105 of the Act have been authorised by the legislature to be exercised and taken at all events ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e like. What is necessary is that there must be a nexus between the basis of classification and the object of the Act under consideration........... Their Lordships also held as follows: at p. 547-548 The decisions of this court further establish.. (b) that there is always a presumption in favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles. (c) That it must be presumed that the Legislature understands and correctly appreciates the need of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds.. (e) that in order to sustain the presumption of constitutionality the court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation; and (f) that while good faith and knowledge of the existing conditions on the part of a legislature are to be presumed, if there is nothing on the face of the law or the surrounding circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve provisions of the Act itself. Their Lordships discussed the various provisions of the Act including the Preamble and chapters and concluded as follows: (at p. 1611). In view of the foregoing, we consider that there is enough guidance to the competent authority in the use of his discretion under S. 19(1) of the Act and we, therefore, reject the contention that S. 19 is obnoxious to the equal protection of laws guaranteed by Art. 14 of the Constitution, we need only add that it was not, and could not be disputed that the guidance which we have held could be derived from the enactment, and that it bears a reasonable and rational relationship to the object to attained by the Act and, in fact, could fulfil the purpose which the law seeks to achieve, viz., the orderly elimination of slums.......... In the present case, guidance is available in S. 105 itself as well as from other provisions of the Act to the warrant officer for taking action under S. 105 and this guidance bears a reasonable and rational relationship to the object to be attained by the Act, and, in fact, would fulfil the purpose which the Customs Act seeks to achieve as mentioned in S. 11 of that Act. 24. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or seizure should be used........ Regarding the varying circumstances under which the warrants may be issued, the learned Judges observed, contrasting those circumstances with circumstances under which documents could be summoned under S. 108 or required to be produced under S. 107, as follows:- It is possible either for an investigation officer to pin-point, specify or identify a document in advance which may prove useful or relevant in proceeding under the Act. It is also unnatural to expect that when evasions of the provisions of the Act or any provision of the repealed Act, such as smuggling of contraband goods, or smuggling of foreign currencies, are suspected, entries will be found honestly disclosing these transactions. The entries may be made in a surreptitious manner so as to screen, as much as human ingenuity could devise, the true nature of the transaction, as was found in the Calcutta case reported in Surajmull v. Commissioner of Income Tax, AIR 1961 Cal 578 . In that case, a Bhajan book contained a slip of paper which led to the discovery of assets worth ten lakhs of rupees and therefore was found to be extremely relevant .......... It is thus not possible t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onnected with or under the control or possession of the person who is proceeded against. In fact the section does not limit the power of search or seizure for goods, and documents and things to the premises either in occupation or under control of any particular person. (4) We also do not think that the power to search entrusted to the officers of the grade of Assistant Collector of Customs who is a fairly responsible person in the hierarchy, is an unguided and uncanalised power. That, is given circumstances, the power is liable to be abused or misused is not relevant in considering whether the grant of the power is absolute or naked as it is sometimes described. The exercise of the power is conditions by the requirements that the Officer must have a reason to believe. It is necessary to note the difference in the phraseology used under the Sea Customs Act when the power was given under S. 178A to seize goods. (5) There are several safeguards available in the law as follows :- (i) the Assistant Collector must have information and must act in the circumstances which furnish him reason to believe; (ii) the documents or things should be relevant and useful though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , documents etc., Long afterwards in 1962, when the Legislature repealed the Sea Customs Act and enacted in its place, the Customs Act in 1962, the legislature obviously considered that the provision as in section 105 was necessary and that provision such as in section 172 of the Sea Customs Act was not sufficient to achieve the object and purpose of the new Act and had to be replaced by a different provision (as in section 105, Customs Act). The Legislature, as being made up of legislators all whom are citizens who have their houses and premises, must have known the effect of this new enactment on the right and desire of an ordinary citizens to enjoy peace and privacy in house without being made liable to searches, as far as possible. With full knowledge, the legislature made the provision in section 105 as it considered that the comfort and convenience, by way of ordinary civil liberties, of the individual had to be sacrificed to a certain extent in the larger interests of the community as a whole. Obviously, the legislature introduced section 105 by way of striking a balance between the rights of the individual citizen and the needs of society as a whole. While doing so the Legi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d rupees or with both. This makes it a serious offence on the part of a customs officer with liability to serious consequences to himself, if he issue a search warrant without having reasons to believe as mentioned in S. 105 of the Act.: 33. The object of search under S. 105 is generally to reach at articles of search namely, goods liable to confiscation etc., which are secreted, which articles could not be secured by requisition under S. 107, or by summons to produce, issued under S. 108. Persons, who secure such things, would ordinarily be smugglers or others who are contravening the concerned provisions of law for the benefit or advantage of themselves. For purposes of convenience, we may refer to them as evaders . They include smugglers to deal with the activities concerned officers. Government had to equip them with suitable and necessary powers to enable them to reach at the articles of search, to seize them, to scrutinise them and find out the real meanings, purport and significance of documents (including administrative files and accounts) just as Government may furnish them with X ray equipment to find out the contents of articles of search which are concealed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for purposes of the enquiry were seized and in the said seizure all the provisions of the Customs Act, 1962 are complied with. The allegation ...................... that the proceedings envisaged by S. 165 of the Cr. P. C. violated in the said search and seizure by respondents 2 and 3 is incorrect and the mahazars drawn are self explanatory ................. The petitioner will be given ample opportunities when the proceedings are initiated under the Customs Act and the petitioner can reserve (resort) to statutory mode of appeal envisaged by the said Act ......... 36. The wording adopted in the Warrants Nos. 9 and 10 concerned in this case amounts to practically an extract of the wording in S. 105 of the Customs Act. 37. In S. C. A. No. 459 of 1968, the warrant issued was as follows :- Authority to search after information of a particular offence . . . . . . . . . . . . . . . . . . . . . . . Whereas information has been laid before me of the suspected commission of the offence under S. 11 read with S. 111 of the Customs Act, 1962 (52 of 1962) and it has been made to appear that the production of contraband goods and documents relating thereto are essential to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r had was also different. In one case, he had definite information that gold and gold ornaments were being kept. In the other cases, warrant officer had only information that contraband goods and documents were kept in the premises. The details, which are given in a warrant, are necessarily dependent on the circumstances in which the warrant officer issues the warrant and the degree of detail of information which he himself had in his possession then and which furnished to him reason to believe such as mentioned in section 105. It would also depend on whether the entire information which he had or only that part of it which he considered safe, necessary, desirable or expedient in the public interest to mention in the warrant. There might be cases in which information available to a warrant officer is just to the effect that goods liable to confiscation and documents or things which would be useful for relevant proceeding under this Act were searched in a particular place. Supposing that, in such a case, the information is sufficient to give him reason to believe about such secreting is he to issue warrant for search or is he to remain inert without taking any action. Section 105 it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Narsa Raju contends that a large number of files seized are prima facie not useful for or relevant to any proceeding under the Customs Act and are not liable for confiscation. It is not possible for this court to decide at this stage, as to whether any of the documents seized will be useful for or relevant to any proceeding under the Customs Act. The question as to their usefulness and relevancy will have to be decided by the concerned customs authorities after careful scrutiny and consideration not only of their express contents but also of what can be readout of them or into them by studying and scrutiny with reference to other material at their disposal one material may be relevant by itself. Another material may be relevant when considered with some other material. The competent officer, who has power to seize III will have to exercise that power after scrutinising them with reference to the relevant provisions of the Act. We are not in a position to say that any of the articles of search has been illegally taken into the custody except the two bottles are detained illegally and that otherwise the contention regarding defect (item ix) cannot be accepted by us. Alleged defect (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earch officer noted down the names of the owners. The learned Government Pleader explains that the premises searched strictly came within the description given by the warrant officer in the warrant namely, 'premises No. 24-1-13 Upstairs, Thomson Street, Visakapatnam' and that the warrant and search would be perfectly legal even if the names of all the owners were not filled up at the root of the warrant (coming after the signature of the warrant officer) and even if only some of the names were mentioned. He also explains that every one of the five entries of owners is a partnership in which the petitioner Rai Bahadur Sait Sri Ram Durga Prasad is a partner. The premises to be searched have been indicated clearly and completely in the warrant by the Warrant Officer. We agree that the search of those premises would have been valid and lawful even if the owner or person in possession of those premises was not specified as contended before us. 45. Thus, the alleged defects (i) to (x) do not vitiate the issue of warrants and search except to the extent of detention of Indian made beer already referred to by us. Accordingly, we find that there was sufficient compliance with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision in Customs Act (Central Act 52/1962) which is section II of that Act. 47. Shri D. Narasa Raju himself states that the purpose and policy of the Act is to enforce compliance with the provisions of the Act and to prevent violation of the provisions of the Act. The Act, directly by its own provisions and indirectly by various provisions in other Acts like S. 23-A of the Foreign Exchange Regulation Act read with S. 11 of the Customs Act, has wide scope and field for the purpose of ensuring the security and well-being of the country and its citizens. This contention No. 4 is not tenable. 48. Contention No. 5 Shri D. Narasaraju, contends that the words any proceeding under this Act in section 105(1) must mean only any proceeding which are pending or which was in contemplation at the time when the Assistant Collector of Customs authorises a search under Section 105(1). The learned Judges of the Bombay High Court have considered these aspects and observed as follows : Attention was focused on the popular prejudice against any search or seizure as a violation of individual, personal liberty or rights in property. The search under the section is styled as a revving se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roving that they are not smuggled goods shall be on the person from whose possession the goods are seized. The Supreme Court observed regarding section 172 of the Sea Customs Act in Mohd. Serajuddin v. R. C. Misra, 1983(13) ELT 1370(SC) as follows at p. 762-763 : Section 172 of the Sea Customs Act, by its second paragraph, brings into operation the provisions of the Criminal Procedure Code, and, therefore, the Magistrate's jurisdiction is both under section 172 of the Sea Customs Act and the Criminal Procedure Code. There can be no doubt also that unlike section 96, the Magistrate is to be guided by the belief of the customs authorities, though he may prevent undue harassment in cases, where it can be seen that the belief is not entertained by the Customs Officer or his action is mala fide. The Magistrate is certainly entitled to satisfy himself about the belief of the Customs Officer, but is not required to make up his own mind independently of that belief. To this extent only is the matter in the control of the Magistrate, before he issues the warrant ...................................... The above passage makes it clear that even under section 172 of the Sea ..... 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