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TMI Blog2000 (12) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... Ludhiana side towards Phagwara. His car was checked at the check post set up for checking the vehicles at Hoshiarpur Chowk. During the search of his car, two bags containing Indian currency notes amounting to Rs.21,05,000 were found. The petitioner was detained and the car and currency notes were also taken into custody for alleged offences under sections 411 and 414 of the Indian Penal Code read with sections 9(1)(b) and 9(1)(d) of the Foreign Exchange Regulation Act, 1973. FIR No. 27, dated March 21, 1998, was lodged with the Police Station, Sadar, Phagwara. On March 22, 1998, the police authorities applied to the Chief judicial Magistrate for police remand of the petitioner for a week. On receipt of the information about this seizure, the income-tax authorities recorded the statement of the petitioner on March 23, 1998, to enquire into the source of the currency notes worth Rs. 21,05,000. Not satisfied with the explanation of the petitioner, respondent No. 1 issued a requisition under section 132A of the Act on March 23, 1998, requiring respondent No. 3 to deliver the currency notes to him, as according to him, the same represented income or property which had not been or would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cedure Code, and as per sub-section (3) of section 102, he was required to report the seizure to the magistrate having jurisdiction over the case. It was further stated that thereafter the seized property could only be dealt with in accordance with the orders of the magistrate passed under section 457 of the Criminal Procedure Code. He further contended that till such time the magistrate passes an appropriate order under section 457 of the Criminal Procedure Code, the police authorities would be deemed to be in possession of the seized property on behalf of the court or as a custodian of the court. For this purpose, he relied on the judgment of the Gujarat High Court in Suraj Mohan Babu Mishra v. State of Gujarat, AIR 1967 Guj 126. It was, therefore, contended that the currency notes of Rs. 21,05,000 in the possession of respondent No. 3 should be deemed to be in the court's custody and, therefore, the impugned requisition dated March 23, 1998, under section 132A of the Act was invalid as respondent No. 1 had no jurisdiction to make such a requisition to a court. He placed reliance on the decision of this court in CIT v. Balbir Singh [1993] 203 ITR 650, and also on the decisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under circumstances which create suspicion of the commission of any offence. (2) Such police officer, if subordinate to the officer in charge of a police station, shall forthwith report the seizure to that officer. (3) Every police officer acting under sub-section (1) shall forthwith report the seizure to the Magistrate having jurisdiction and where the property seized is such that it cannot be conveniently transported to the court, he may give custody thereof to any person on his executing a bond undertaking to produce the property before the court as and when required and to give effect to the further orders of the court as to the disposal of the same. "457. Procedure by police upon seizure of property.--(1) Whenever the seizure of property by any officer is reported to a Magistrate under the provisions of this Code, and such property is not produced before a criminal court during an inquiry or trial the Magistrate may make such order as he thinks fit respecting the disposal of such property or the delivery of such property to the person entitled to the possession thereof, or if such person cannot be ascertained, respecting the custody and production of such property. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 523 of the Criminal Procedure Code before the magistrate for seeking an order for delivery of the seized property to him. This application was contested by the State on the ground that the magistrate can only pass such an order under section 523 of the Criminal Procedure Code after the seizure has been reported to him by the police authorities and in the absence of such a report the magistrate could not pass such an order merely on the application of a claimant. The Gujarat High Court rejected this contention by observing as under : "With respect, I am unable to agree with that view if it is taken to hold that it is only on a police report and not on any application of any party affected by seizure of any such property, that the court can pass the order under section 523 of the Criminal Procedure Code. Apart from there being any such specific limitation imposed on the magistrate exercising his powers on being moved by any such party, a power to call for a report, on such information given to him is implicit in the power given to him to deal with such property seized by the police. If that were not so, the effect of section 523 would be meaningless, and even the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e done under section 516A of the Code. Then comes section 517 which requires the court to pass orders in that respect when the trial is concluded. In the case before us, we have to consider the effect of section 523 of the Criminal Procedure Code, and that covers the first stage-which obviously is prior to any proceeding before the court. Now, section 523 provides certain procedure to be followed both by the police and the magistrate with regard to any property seized by the police. Sub-Section (1) thereof runs thus : 'The seizure by any police-officer of property taken under section 61, or alleged or suspected to have been stolen, or found under circumstances which create suspicion of the commission of any offence, shall be forthwith reported to a magistrate, who shall make such order as he thinks fit respecting the disposal of such property or the delivery of such property to the person entitled to the possession thereof, or, if such person cannot be ascertained, respecting the custody and production of such property.' Then comes sub-section (2) which says that if the person so entitled is known, the magistrate may order the property to be delivered to him on such conditions, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich seized that property, till January 20, 1966. When such is the case, whether the court has jurisdiction and authority to act-on any such application given by the owner of the property in respect thereof, is a point to be considered in this petition. The learned magistrate thought that unless actually a report from the police officer was seized that property is received, he cannot act. According to him, he cannot even call for his report, much less deal with that property. Mr. Chokshi referred to me a decision in a case of Ghulam Ali v. Emperor, AIR 1945 Lah 47, where it was held that 'from a strict reading of section 523, it was clear that that order could be passed not on the application of a party but on a report by the police. The facts of that case were that the police acting on some information, recovered from petitioner's possession a horse on September 10, 1941. The police did not report the seizure thereof to the magistrate as they should have done. But the petitioner himself approached the magistrate who passed an order on September 15, 1941, directing the police to hand over the horse to him on security of Rs.400. The magistrate was then moved by the complainant to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rth Rs. 2,99,000 had been seized from one Balbir Singh on September 6, 1977. The said currency notes were produced before the Chief judicial Magistrate who ordered that the same be deposited in the treasury for safe custody. Thereafter Balbir Singh moved an application under section 451/457 of the Criminal Procedure Code, for return of money. This prayer was-accepted by the Chief judicial Magistrate vide order dated October 15, 1977, who directed that the money be handed over to him on Sapurdgi. In pursuance of the order of the Chief judicial Magistrate, the said Balbir Singh approached the Treasury Officer to collect the money, who declined to hand over the money to him on the ground that the Senior Superintendent of Police had informed that the money had been requisitioned by the income-tax authorities vide requisition under section 132A of the Act dated September 15, 1977. It is under these circumstances that Balbir Singh had filed a writ petition and challenged the requisition dated September 15, 1977, issued under section 132A of the Act. The court upheld the claim of Balbir Singh on the ground that the Treasury Officer was holding the case property under the orders dated Sept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne has necessarily to consider, whether the expression 'any officer or authority under any other law for the time being in force' in clause (c) of section 132A(1) can in cases of seizure by a police officer be held to be the officer or authority who has taken into custody the assets which represented either wholly or partly income or property which has not been or would not have been disclosed for the purpose of the Income-tax Act, 1961. The police officer, who seized the property, we have already noticed, has a duty to transport the same to the court or to give custody thereof to any person on his executing a bond and undertaking to produce the property before the court as and when required and to give effect to the further orders of the court as to the disposal of the same. Thus, pursuant to the seizure, his possession or the custody of the property with any person under the bond undertaking to produce the property before the court is for and on behalf of the court and is custodia legis. There can be no transfer or appropriation of any property seized by the police except under the order of the court. Learned counsel for the Income-tax Officer has conceded before us that sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Accordingly, this review petition is dismissed, subject to the above observations." From the above discussion, it clearly %emerges that when a seizure is made by a police officer in connection with an alleged offence and held by him under section 102 of the Criminal Procedure Code, he is duty-bound to transport the same and produce the seized property before the court of competent jurisdiction. In case, it is not convenient to transport the said property to the court, he may give its custody to any person on his executing a bond and an undertaking to produce the property before the court as and when required and to give effect to further orders of the court as to the disposal of the same, There can be no transfer or appropriation of any seized property by the police authorities except under an order of the magistrate under section 457 of the Criminal Procedure Code. However, till the magistrate issues an order about the custody of the seized assets, the possession will continue to be that of the police officer. It is only after the magistrate passes an order under section 457 of the Criminal Procedure Code that the person getting possession of the seized property shall be dee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ets representing alleged undisclosed income for delivery of such assets. The second step is the compliance by such officer or authority who then delivers the assets to the requisitioning authority in accordance with section 132A(2) of the Act. In the present case, as already observed, the possession on March 23, 1998, was with the Station House Officer, Police Station, City Phagwara, and, as such, respondent No. 1 was well within his competence to issue a requisition under section 132A(1) of the Act. However, respondent No. 3 who had seized the cash and was in its possession in accordance with the provisions of section 102(1) of the Criminal Procedure Code was duty-bound to transport the same to the court of competent criminal jurisdiction or to give its custody to any person on his executing of a bond and undertaking to produce the property as and when required and to give effect to further order as to its disposal. It was his bounden duty to obtain an order under section 45 7 of the Criminal Procedure Code before parting with the possession of the property. Therefore, his action under sub-section (2) of section 132A of the Act in delivering the possession of the seized amount to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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