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TMI Blog2018 (2) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... October, 2017 passed by the J. M. F. C, Kathor, District: Surat below Exh. 3 (Muddamal Application) in connection with the first information report being C. R. No. I-253 of 2016 registered with the Kamrej Police Station, Surat for the offence punishable under sections 34, 120B, 394A read with 114 of the Indian Penal Code, which on conclusion of the investigation and filing of the charge-sheet, culminated in the Criminal Case No. 726 of 2017 in the Court of the JMFC, Kathor, Taluka: Kamrej, District: Surat. It appears from the materials on record that the respondent No. 2, namely, Shaukatali Imamhussain Shaikh lodged a first information report, referred to above, in connection with a robbery of Rs. 13,00,000/- in cash. In the course of the investigation, the police recovered the amount of Rs. 13,00,000/- in cash from the possession of the accused persons. As a huge amount of currency was seized by the police as a Muddamal, the Investigating Officer one Shri M. B. Tomar, In-charge Police Inspector, Kamrej Police Station, Surat addressed a letter dated 11. 01. 2017 to the Deputy Director of Income Tax (Inv. )-II, Surat in this regard. It appears that two applications came to be filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issions, has placed reliance on two decisions of this Court ;(i) in the case of Lalit Bisnoi vs. State of Gujarat, Criminal Revision Application No. 77 of 2015, decided on 31st July, 2015 and (ii) in the case of Uday Navinchandra Sangani vs. Vikrant Pal Singh & Ors. , Special Criminal Application No. 58 of 2015, decided on 20. 01. 2015. 5. In such circumstances, referred to above, Mr. Bhatt, the learned senior counsel appearing for the applicant submitted that there being merit in this application, the same be allowed and the impugned order be quashed. 6. On the other hand, this application has been vehemently opposed by Mr. Radhesh Vyas, the learned counsel appearing for the respondent No. 2-original first informant. The first submission of Mr. Vyas is in the nature of preliminary objection with regard to the maintainability of this application. According to Mr. Vyas, the impugned order passed by the Magistrate is revisable and, therefore, the applicant should be relegated to the remedy of filing a revision application before the Sessions Court. According to Mr. Vyas, his client has also filed a revision application before the Sessions Court and, therefore, both the revision app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the said amount, no further proceedings can be started against any person, from whose custody the amount was recovered. The Lower Court has not properly appreciated the provisions of Section 132 of the Income Tax Act and rejected the claim of the applicant. 11. In the case of Parasnath vs. Union of India & Ors. , reported in 1997 (225) ITR 365. The Apex court has held as under :- "(i) The Criminal Court had no authority to order handing over of property, i. e. jewellery or cash to persons claiming it. (ii) xxx xxx xxx (iii) xxx xxx xxx (iv) Once an assessment is over the seized property is to be disposed of as per the determination made by the assessing authority. (v) Where assessment is not complete the authority issuing the warrant shall take further steps within the stipulated period as required under Section 132 (5) of the Act. " 12. In the case of Lalit Bisnoi vs. State of Gujarat, Criminal Revision Application No. 77 of 2015, decided on 31st July, 2015, a Coordinate Bench of this Court dealt with an identical issue and has held as under; "8. It would be profitable to reproduce section 132A of the Act, which reads as under : 132A : Powers to requisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred to in clause (a) or clause (b) or clause (c), as the case may be, of that sub-section shall deliver the books of account, other documents or assets to the requisitioning officer either forthwith or when such officer or authority is of the opinion that it is no longer necessary to retain the same in his or its custody. (3) Where any books of account, other documents or assets have been delivered to the requisitioning officer, the provisions of sub-sections (4A) to (14) (both inclusive) of section 132 and section 132B shall, so far as may be, apply as if such books of account, other documents or assets had been seized under sub-section (1) of section 132 by the requisitioning officer from the custody of the person referred to in clause (a) or clause (b) or cl. (c), as the case may be, of sub-section (1) of this section and as if for the words "the authorised officer" occurring in any of the aforesaid sub-sections (4A) to (14), the words "the requisitioning officer" were substituted. 9. The provision of section 132A provides for the authority prescribed in the said provision in consequence of information in his possession has reason to believe that any person has omitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when the search is made under section 132 books of account, requisition under section 132A after the 31st day of May, 2003. Shri M. M. Bhatt, learned Senior Counsel appearing for the applicant-Department is right in pointing out that any further delay caused would hamper the right of the concerned authority of assessing or reassessing the total income of the assessee of earlier years and that may also cause loss of required material and may have bearing on collection of tax causing substantive loss to the Revenue, if eventually the liability is saddled. 10. Reference would be necessary to the case of Deputy Director of Income-tax v. State of Gujarat (supra), wherein this Court has held that there is no power with the Police Authority to withhold the currency notes. Once the police seizes the currency notes and informs the Income-tax Department, the requisition has to be made. The Court has also held that the inquiry under section 451 of the Code of Criminal Procedure and one under section 132A of the Act are quite different. There are limited powers under section 451 of the Code of Criminal Procedure, whereas under section 132A of the Act, a specific provision is made for such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t rendered in the case of Shankarlal Mangilal Kulthe (supra), the aforesaid decision was followed by this Court, wherein the respondent was facing the accusation under section 124 of the Bombay Police Act. He was found carrying cash currency notes of Rs. 5. 90 lakh. When the matter was pending before the concerned Magistrate, the Income-tax Department had sought the custody of such currency notes. Believing the amount was assessable to tax in the hands of the person concerned, their application for interim custody was granted and at the conclusion of the trial, the interim order was made absolute. 11. 1 The respondent-accused challenged the same before the Sessions Court by preferring an appeal and Revision Application. Both the proceedings were allowed setting aside the order passed by the Magistrate handing over custody of the currency notes to the Income-tax Department. The Appellate Forum also directed the learned Magistrate to hold inquiry in terms of provisions of the CrPC and to pass final order in respect of such muddamal article. The Income-tax Department had pitched its case on the strength of the provision of section 132A of the Act, under which the requisition for cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per custody of such property pending the conclusion of the inquiry or trial, and, if the property is subject to speedy and natural decay, or if it is otherwise expedient so to do, the Court may, after recording such evidence as it thinks necessary, order it to be sold or otherwise disposed of. Explanation. -For the purposes of this section, "property" includes- (a) property of any kind or document which is produced before the Court or which is in its custody, (b) any property regarding which an offence appears to have been committed or which appears to have been used for the commission of any offence. 13. At this juncture, it would be relevant to refer to the decision of the Apex Court in the case of Sunderbhai Ambalal Desai v. State of Gujarat, reported in AIR 2003 SC 638, wherein the Apex Court has held and observed as under : Valueable Articles and Currency Notes : 11. With regard to valuable articles, such as, golden or silver ornaments or articles studded with precious stones, it is submitted that it is of no use to keep such articles in police custody for years till the trial is over. In our view, this submission requires to be accepted. In such cases, Magistrate shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of such property. If the person so entitled is known, the property can be delivered on such condition as the learned Magistrate may think fit and even if such person is unknown, the Magistrate may detain it and necessary procedure shall be followed as provided under the said section. When any property is produced before the Criminal Court during an inquiry or trial, the Court may make such order as it thinks fit for the proper custody of such property pending the conclusion of the inquiry or trial and if property is subjected to natural and speedy decay and/or otherwise it is expedient to do so, the Court may dispose of after recording such evidence as may be necessary. 15. Under the heading of 'valuable muddamal article and the currency notes', it is made obligatory upon all the Courts trying the criminal cases to expeditiously and judiciously exercise the powers under section 451 for the custody and disposal of the property. On account of occurrences of theft and misappropriation, so also of irreversible damage to the property, the Apex Court was thoroughly concerned and directed expedient steps to be taken by the concerned Court. It is also further directed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to the applicant-Department. The Investigating Agency was also not right in contending that the custody of this muddamal article is necessary till completion of the trial when even otherwise, the production of the same through panchnama or exhibiting the same by virtue of video recording of same could have been managed. " 13. In the case of Uday Navinchandra Sangani vs. Vikrant Pal Singh, Special Criminal Application No. 58 of 2015, decided on 20. 01. 2015, a learned Single Judge of this Court, has held as under; "[21] Now, so far as the contention of the learned advocate for the petitioner with regard to the provisions of Section 132A of the Act is concerned, from the record it appears that the respondent No. 1 herein as a Deputy Director of Income Tax (Investigation), Unit 3, Surat, had filed the application under Section 132A of the Act. The concerned authority of the Income Tax Department authorized the respondent No. 1 to initiate the aforesaid proceedings. In the affidavit filed on bahalf of respondent No. 1, it is specifically stated that based on the information made available and after causing necessary inquiry the competent authority under the Income Tax Act was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otes. Hence, scope of inquiry under Sec. 451 of the Code as also under Sec. 132-A of the Act is quite different. 16. The intention of the Legislature by incorporating Section 132 of the Act is only to protect the interest of revenue of the State and if authority is satisfied regarding the source of income, it may pass appropriate order to hand over the muddamal to the assessee or any concerned person. When question of huge currency is involved and if proceedings of inquiry under Sec. 132-A of the Act are initiated, then certainly truth will come before the the Department regarding genuineness of the muddamal seized. [23] Further, this Court, vide order dated 07. 10. 2010 rendered in Special Criminal Application No. 1009 of 2010, observed as under: Under Section 132A of the Income Tax Act, the competent authority if has reason to believe inter alia that any assets represent either wholly or partly income or property which has not been, or would not have been, disclosed for the purposes of the Indian Income Tax Act, by any person from whose possession or control such assets have been taken into custody by any officer or authority under any other law for the time being in for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urat at the earliest. It is clarified that prior to handing over the Muddamal currency notes, the Investigating Officer shall get the videography of the currency notes done as provided in the decision in the case of Sunderbhai Ambalal Soni vs. State of Gujarat, AIR 2003 SC 638, and if necessary, to carry out the Panchnama with the serial numbers of the currency notes, if not already done. A copy of the Panchnama or the videography be placed before the court concerned and the same shall be furnished to the Income Tax Department so also to the respondent No. 2-original first informant. 16. The applicant-department shall be free to undertake all actions permitted under the law, however, he shall make the Fixed Deposit of the entire amount of Rs. 13,00,000/- with any Nationalized Bank within a period of four weeks from the date of taking over such Muddamal currency notes, initially for a period of two years and, thereafter, the same shall be renewed from time to time till the finalization of such proceedings initiated by the applicant-department. Any appropriation, if, is to be made, the same shall be made only with the prior permission of this Court. Rule is made absolute to the afor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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