1. Search and seizure of premises and documents under the Defence of India (Amendment) Rules, 1963 and the Customs Act, 1962 — Challenge to legality of seizures. (Para 1 , 2 , 3 , 12 )
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1965 Supreme(SC) 109
SUPREME COURT OF INDIA
P.B. GAJENDRAGADKAR, C.J.I., K.N. WANCHOO, M. HIDAYATULLAH, V. RAMASWAMI AND P. SATYANARAYANA RAJU, JJ
Durga Prasad etc. Appellants
Versus
H. R. Gomes, Superintendent (Prevention) Central Excise, Nagpur and another etc., Respondents.
Civil Appeals Nos. 677 to 680 of 1965.
Advocates appeared
Mr. G. S. Pathak, Senior Advocate, (M/s. G. L. Sanghi and K. Srinvasamurthy Advocates, and M/s. O. C. Mathur, Ravinder Narain and J. B. Dadachanji, Advocates of M/s. J. B. Dadachanji and Co., with him), for Appellants; Mr. S. V. Gupte, Solicitor-General of India and Mr. N. S. Bindra, Senior Advocate, (Mr. B. R. G. K. Achar, Advocate, with them), for Respondents.
Seizure under the Customs Act does not require physical possession; legal possession is sufficient. Furthermore, the power of search under Section 105 is a general power, and "secreted" includes documents kept out of their usual place to avoid detection.
Headnote:(A) Defence of India (Amendment) Rules, 1963 - Rule 126L(2) and Rule 156 - Customs Act, 1962 - Sections 105 and 110 - Seizure of documents - Power to seize documents under Gold Control Rules - Rule 126L(2) only authorizes seizure of gold and its containers; Rule 156 provides ancillary powers for the effective seizure of gold but does not grant an independent power to seize documents (Para 4).
(B) Customs Act, 1962 - Section 110(3) - Seizure of documents - Physical possession not mandatory for valid seizure - Legal possession is sufficient; where documents are delivered to a bailee for a limited purpose, the bailor retains legal possession and can transfer that possession via a seizure order (Paras 7, 8).
(C) Customs Act, 1962 - Section 105 - Search and seizure - Meaning of "secreted" - Term refers to documents kept not in the normal or usual place with a view to conceal them, or things likely to be secreted (Para 13) - Power of search under Section 105 is of a general character and does not require prior specification of the documents to be searched for (Para 14).
Facts of the case:
Search and seizure operations were conducted at residential-cum-business premises to recover gold and related documents. Documents were initially seized under the Gold Control Rules and subsequently under the Customs Act. The appellants challenged the legality of these seizures, arguing that the initial authorization did not cover documents, that the subsequent seizure lacked physical possession as the documents were in another city for translation, and that the search authorization under the Customs Act was too general and lacked evidence of documents being "secreted."
Findings of Court:
The court found that the initial seizure under the Gold Control Rules was unauthorized as the rules did not provide for the seizure of documents. However, the subsequent seizure under the Customs Act was valid because the Collector is a "proper officer," legal possession is sufficient for seizure even if physical possession is with a bailee, and there was sufficient material to believe the documents were relevant. Regarding the search under Section 105, the court held that "secreted" includes items kept out of the usual place and that the power of search is general.
Issues: 1. Whether Rule 126L(2) of the Defence of India (Amendment) Rules, 1963 authorized the seizure of documents. 2. Whether physical possession is necessary for a valid seizure under Section 110(3) of the Customs Act, 1962. 3. Whether the term "secreted" in Section 105 of the Customs Act requires evidence of concealment and whether the search power is general or specific.
Ratio Decidendi: Ancillary powers under Rule 156 cannot be used to create an independent power to seize documents not explicitly mentioned in Rule 126L(2). Under the Customs Act, legal possession (as a bailor) allows for a valid seizure order even if the items are physically elsewhere for a limited purpose. The power of search under Section 105 is a general power, provided the officer has reason to believe relevant items are "secreted," which includes items kept away from their usual place.
Result: Appeals dismissed.
Legal Category Hierarchy
Table of Contents
2. Validity of document seizure under Rule 126L(2) — Definition of proper officer and physical possession under Section 110(3) — Meaning of secreted and general search under Section 105. (Para 4 , 6 , 7 , 9 , 10 , 13 , 14 )
3. Rule 126L(2) excludes document seizure — Section 110(3) permits seizure of relevant documents — Legal possession via bailment suffices for seizure — Section 105 allows general searches. (Para 4 , 5 , 6 , 7 , 8 , 10 , 13 , 14 )
4. Seizure under Section 110(3) of the Customs Act requires transfer of legal possession, not necessarily physical possession; Section 105 permits general searches for secreted relevant documents. (Para 8 , 14 )
6. Does Rule 126L(2) of the Defence of India (Amendment) Rules, 1963 authorize the seizure of documents?
No. The rule only authorizes the seizure of gold and its containers. The court noted that a subsequent amendment specifically added the power to seize documents, confirming that the original Rule 126L(2) lacked such authority. (Para 4 )
7. Does a valid seizure of documents under Section 110(3) of the Customs Act require the seizing officer to have actual physical possession?
No. Seizure involves the transfer of legal possession. If documents are with a bailee for a limited purpose, the bailor retains legal possession, and a seizure order transfers that legal possession to the officer. (Para 7 , 8 )
8. What is the meaning of the term secreted under Section 105 of the Customs Act for the purpose of authorizing a search?
It refers to documents kept out of their normal or usual place to conceal them, or documents that are likely to be kept out of the way to prevent discovery by law officers. (Para 13 )
9. Must a search authorization under Section 105 of the Customs Act specify the particular documents to be searched for?
No. Section 105 grants a power of general search for any documents or things useful for proceedings. Specific descriptions are not required in advance as relevance is determined after the search. (Para 14 )
Judgment
RAMASWAMI, J.: These appeals are brought by a certificate from the judgment of the High Court of Judicature at Bombay (Nagpur Bench ) dated 25-2-1964 in Special Civil Applications Nos. 437, 448, 459 (sic) and 490 of 1963 wherein the respective appellants challenged the search and seizures carried out by the respondents at the residential-cum-business premises of the appellants in exercise of the power derived form R. 126 L (2) of the Defence of India (Amendment) Rules, 1963 (hereinafter called the Gold Control Rules ) and Ss. 105 and 110 of the Customs Act, 1962 (hereinafter called the Customs Act ).
CIVIL APPEAL NO. 678 OF 1965:
2. This appeal arises out of Special Civil Application No. 490 of 1963 which relates to the search and seizure of the premises of Sri Durga Prasad on 19-8-1963 and 20-8-1963. The authorisation was granted by the 1st respondent-Assistant Collector of Customs and Central Excise, Nagpur -to the second respondent -Superintendent of Customs and Central Excise-on 19-8-1963 to search the appellant s premises "Shreeram Bhawan" and to seize and take possession of all gold, gold ornaments etc. which were believed to have been kept in contravention of Gold Control Rules and also account books and documents. The authorisation was granted under R. 126 L (2) of the Defence of India (Amendment) Rules 1963 and reads as follows:
"To
Shri S. H. Joshi.
Superintendent of Customs
and Central Excise, Nagpur.
Whereas information has been laid before me and on due inquiry thereupon I have been led to believe that the premises/vaults/lockers specified below and said to be in possession and control of Shri R. B. Shri Ram Durga Prasad are used for storage of Gold/Gold ornaments in contravention of the provisions of the Gold Control Rules.
Details of premises/vaults/lockers to be searched.
Shri Ram Bhavan and premises, appurtenances thereto including offices, outhouses, etc. Ramdaspeth. Nagpur.
This is to authorise and require you to enter the said premises with such assistance as shall be required and to use if necessary, reasonable force for that purpose, and to search every part of the said premises and to seize and take possession of all gold/gold ornaments along with the receptacle, container or covering thereof which you may reasonably believe to be kept in contravention of the Gold Control Rules and also of such books of accounts, return or any other documents, as you may reasonable believe to be connected with any contravention of Gold Control Rules, and forthwith report to this office regarding the seizure made, returning this order, with an endorsement certifying what you had done under it immediately upon its execution.
Given under my hand and seal of this office this Nineteenth day of August 1963.
Seal of Office (Sd.) KRISHAN DEV,
19th August, 1963
Assistant Collector of Customs and Central Excise,
Nagpur."
3. Having taken possession of the documents, respondent No. 2 retained those documents at Nagpur for about 8 days. Thereafter the documents were sent to Delhi temporarily for proper translation by the Departmental Hindi Officer. While the documents were at Delhi, the 3rd respondent viz., the Collector of Customs, Nagpur, made an order of seizure under S. 110 (3) of the Customs Act. The order of seizure dated 6-9-1963 states:
"Whereas information has been received that the under mentioned documents are in the custody of Shri S. H. Joshi, Superintendent of Central Excise, Nagpur:
1. Nagpur ki Juni Rokad Bahi Hisab Bahi Shri Nagpur ki 24-7-1958 to 28-10-1959 (in Hindi) pages 1 to 96;
2. Shri Rokad Bahi Nagpur (in Hindi) pages 1 to 27;
3. Rokad-Bhuramalji Agrawal (in Hindi) pages 1 to 78;
4. Shri Khata Bahi Bhai Bhuramalji Agrawal Samvat 2000-2001, 2005-2006 (in Hindi) pages 1 to 53;
5. Partners Shri X Du Group Hisab Bahi-upto 3-5-1959 (in Hind) pages 1 to 45;
6. Shri Khata Bahi-Bh. Bhuramalji Agrawal-Samvat 2006-7 to 2012 (in Hindi) pages 1 to 57:
7. Hisab (bahi)-Partners-G X F Group upto 3-5-1959 (in Hindi) pages 1 to 20;
8. Om-P.
